In This Article:
* Shanghai shares hit 8-week high, helped by MSCI news
* Spreadbetters expect mostly firmer open for European stocks
* Fed rate hike fully expected, another one in Dec seen likely
* Brent oil hits 4-year high before easing
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Sept 26 (Reuters) - Asian shares pulled ahead on Wednesday, as Chinese markets extended their recovery to hit eight-week highs on receding fears about the trade war as well as hopes China's weighting in the global benchmark will be increased.
Spreadbetters expected European stocks to open flat to firmer, with Britain's FTSE starting little changed, Germany's DAX adding 0.2 percent and France's CAC up 0.05 percent.
Other markets were more subdued as U.S. bond yields edged near a seven-year peak ahead of a widely expected rate hike by the Federal Reserve and as international oil prices rose to four-year highs.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 percent. Shanghai shares rose 1.55 percent.
Global index provider MSCI said it will consider quadrupling the weighting of Chinese big-caps in its global benchmarks and also proposed adding mid-caps and shares listed on Shenzhen's start-up board ChiNext.
The news further improved the mood of the market, where fears about the trade war have been offset by hopes Beijing's stimulus could help the economy weather the impact of U.S. tariffs.
Japan's Nikkei climbed more than 0.3 percent, touching its highest since late January.
Wall Street shares were mixed overnight, as rises in energy shares on higher oil prices and gains in consumer discretionary shares following strong U.S. consumer confidence were offset by falls in many other sectors.
U.S. consumer confidence hit an 18-year high, adding to a string of recent data that pointed to the strong U.S. economic momentum, despite concerns about trade wars U.S. President Donald Trump is waging.
The Dow Jones Industrial Average fell 0.26 percent, the S&P 500 lost 0.13 percent while the Nasdaq Composite added 0.18 percent.
The utility sector, sometimes seen as an alternative to bonds because of the relative steadiness of their business, was the worst performer as investors braced for a rate hike by the Federal Reserve later on Wednesday.
The benchmark 10-year Treasury yield rose to as high as 3.113 percent, near its seven-year peak of 3.128 percent touched on May 18. It last stood at 3.096 percent.
Fed funds rates futures implied traders are fully pricing in a rate hike on Wednesday, and another 85 percent chance the Fed would raise rates again in December.