Mixed sentiment on global floors, uncertainty in the Asia-Pacific region over the Chinese credit crunch and falling oil prices looked likely to drag Russian stocks down on Wednesday’s opening. However the floors started off the day with slight gains.

Tuesday’s trading session took Russian indicators higher with the MICEX having added 0.57 percent to 1297.59, and the RTS finishing up 0.9 percent at 1244.16.

Russian floors are also likely to react to Tuesday’s good news from the US in Wednesday’s trade. Tuesday's US data showed strong gains in business spending plans. Also US home prices posted record gains, indicating that recovery may be on track in the key sector of economy.

Europe's main stock markets have rebounded on Tuesday. London's FTSE 100 index of leading shares advanced 1.21 percent to close at 6,101.91 points, Frankfurt's DAX 30 index climbed 1.55 percent to 7,811.30 points, while in Paris the CAC 40 gained 1.51 per cent to 3,649.82 points.

The data took US stocks up, with the Dow Jones Industrial Average adding 0.69 percent to 14,760.31.The S&P 500 added 0.95 percent closing at 1,588.03, while the NASDAQ rose 0.82 percent to 3,347.89.

Asian stocks were mixed on Wednesday as investors in the region’s key markets Japan and Mainland China continued to worry about a liquidity crisis spurring in the world’s second-largest economy, despite reassurance from China's central bank.

Moody's ratings agency said a prolonged credit crunch endangers Chinese companies, “especially those in the private sector with weak credit quality, because it heightens the risk that banks will scale back lending to those companies.”

The Shanghai Composite Index fell 1.2 percent to 1,937.17. Japan's Nikkei 225 fell 0.9 percent to 12,904.01. In Hong Kong, the Hang Seng gained 0.8 percent to 20,022.30. South Korea's Kospi dropped 0.1 percent to 1,778.26. Australia's S&P/ASX 200 gained 1.3 percent to 4,714.40.

Oil is currently trading lower with Brent losing 0.5 percent to $100.70, and WTI down 0.9 percent to $94.40.

Mario Tama/Getty Images/AFP

 Russian stock market has opened on the positive territory on Tuesday, rebounding after Monday’s drop.

Investors however expect stocks to fall later in the day, as oil prices are declining and the international outlook remains negative on China liquidity crisis and concerns over Fed’s stimulus.

Russian stocks ended Monday with losses. The MICEX slipped 0.66 percent to the 1290.26 mark, while the RTS lost 1.02 percent to 1233.04. Equities of KAMAZ, Novatek, InterRAO, Rosneft and E.On Russia kept Russian market trade afloat with gains.

Major European stock markets also slumped Monday, reacting to worries over the Chinese liquidity crisis and the withdrawal of US Federal Reserve stimulus.

London's FTSE 100 index of leading shares slid 1.42 percent to 6,029.10, while Frankfurt's DAX 30 fell 1.24 percent to 7,692.45 points. In Paris the CAC 40 dropped 1.71 percent to 3,595.63 points.

Stocks in Spain and Italy also fell on rising Italian and Spanish state borrowing costs on the bond market.

US stocks ended Monday’s roller coaster trade with steep declines. Benchmark stock indices demonstrated a steep fall after the opening bell.

The Dow Jones Industrial Average had been down as much as 250 points on Monday ending down 139.84 points, or 0.9 percent, at 14,659.56.

The S&P 500 finished down 19.34 points, or 1.2 percent, at 1,573.09, with all of its 10 major sectors in negative terrain. The NASDAQ closed down 36.49 points, or 1.1 percent at 3,320.76, following an intraday low of 3,294.95 and a session high of 3,344.66.

Tuesday’s news from Europe will include the UK’s industry data on mortgage approvals, reflecting the demand in the housing sector. Bank of England policymakers are to testify on inflation and the economic outlook before the parliamentary treasury committee, Investing.com reports.

Also on Tuesday Italy is to hold an auction of 10-year government bonds.

The US is to publish official data on durable goods orders and closely watched reports on consumer confidence and new home sales later in the day.

Asian stocks were struck by worries over problems in the Chinese banking system. Mainland Chinese stocks fell sharply for a second straight day on Tuesday. Losses hit markets in other Asian regions as well.

The Shanghai Composite lost 3.8 percent to 1,888.69 and Hong Kong's Hang Seng dropped 1.4 percent to 19,533.05. Japan's Nikkei 225 shed 1.6 percent to 12,848.96. South Korea's Kospi slid 1 percent to 1,780.81 and Australia's S&P/ASX 200 declined 0.5 percent to 4,645. Stocks in Taiwan and the Philippines also fell.

Brent oil is currently trading at $101.35, while WTI is up 0.17 percent, trading at $95.30.

"The committee currently anticipates that it will be appropriate to moderate the monthly pace of purchases later this year, and if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year," Bernanke said.

Investors’ fears have come true, as the news sent stocks and bonds sharply lower, pushing benchmark Treasury yields to a 15-month high, Reuters reports. The uncertainty on when exactly the Fed will start scaling back the stimulus still looms.

The US central bankers believe that moderate growth will bring further improvement to the labour market. The number of unemployed people in the US is expected to slip to 7 percent from the current 7.6 percent by the time the Fed ends bond buying. The Fed expects the unemployment rate in 2013, 2014, and 2015 to be lower than previously forecast. Bernanke added that in case the optimistic forecasts do not come true, the Central Bank could resume bond purchases.

Ben Bernanke also said the Fed expects inflation to climb towards the 2 percent target mark. The US central bank’s forecast for 2013 GDP growth was updated to a slightly lower reading, however the outlook for 2014 was upgraded.

"The committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall," FOMC said.

In fact not much new was said on Wednesday since the FOMC last released the minutes of its previous meeting in May. Then Bernanke spoke of the possibility of pulling out of the huge bond buying if the labor market shows “substantial improvement.” However there has been no “substantial improvement” yet, says David Williams, director at Strategic Gold Corporation who spoke to IBTimes TV.

“They are not going to change anything because it hasn’t improved substantially, so that’s just giving us more time, at least until the end of the year even not after that,” he said. “I think things will stay generally the same.”

According to a Reuters poll of 17 top Wall Street bond dealers, 16 of them expect the scaling back the bond purchases will begin with September’s FOMC meeting.

Stocks, bonds and commodity markets in Europe and Asia sold off sharply on the news from the Fed.

Gold tumbled to a 2 and a half year low also reacting to the news from the US. Bullion prices fell below $1,300 an ounce in London, exceeding April’s drop into a bear market, Bloomberg says. In 2013 the precious metal has already lost 22 percent, as investors sold off gold becoming less confident in it as a hedge from inflation. This year’s drop may well become the biggest annual decline in more than three decades.

Silver also slid significantly, diving to the lowest price since 2010.