Asian equity markets stabilized on Tuesday following two straight sessions of sharp losses but caution prevailed ahead of a Federal Reserve meeting and turmoil in emerging markets.
Emerging market currencies and stocks saw heavy selling abate as the U.S. central bank starts a two-day policy meeting later in the day; most analysts expect another $10 billion reduction in its monthly bond-purchase program.
“While it makes sense to be cautious about emerging market shares generally, a re-run of the 1997- 98 Asian crisis is unlikely and emerging markets are unlikely to pose a major threat to global economic recovery,” wrote Shane Oliver, head of investment strategy and chief economist at AMP Capital, in a note.
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