Asian stocks mark time, waiting for clearer view on U.S. rates

Asian stocks consolidated recent gains on Wednesday before a U.S. central bank policy meeting that could signal how much monetary tightening to expect during the remainder of the year, with an immediate rate hike fully priced in by markets.

Though recent data, particularly out of China, has fueled a rally in Asian equities since the start of the year, investors are expecting more headwinds for emerging markets due to an increasingly hawkish Fed.

Having posted its second-biggest daily gain this year in the previous session, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent near the day's highs in cautious trading.

Japan's benchmark Nikkei average .N225 was down 0.14 percent while stocks in mainland China .SSEC and Korea .KS11 declined 0.13 and 0.2 percent respectively.

Index futures in Europe pointed towards a cautious start. FFIc1

Asian share markets have had a good start to the week thanks to positive news out of the region's two economic powerhouses, China and India.

Strong data out of China this week have sparked a fresh rally in Hong Kong stocks .HSI, while Indian shares climbed to a record high on Tuesday as investors regarded Prime Minister Narendra Modi's landslide victory in the northern state of Uttar Pradesh as an endorsment for his economic reforms.

While recent economic Chinese data has been supportive, Premier Li said at a press conference that China's economy faces domestic and external risks this year, but added the country has many policy tools to cope with them.

A worrying drop in global oil prices, however, has cast doubt on how much Asian policymakers are likely to raise interest rates this year to maintain their premium over U.S. rates.

Brent crude LCOc1 has lost more than 8 percent in the past five trading sessions despite a 1.2 percent bounce on Wednesday.