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Equities in waiting mode ahead of bank decisions

Global equities markets drifted Tuesday with dealers on tenterhooks on the first day of key monetary policy meetings for the US Federal Reserve and Bank of Japan. "As they have throughout the day across Asia, Europe and the US, stock markets continue to tread water with moves in either direction lacking any traction as traders refuse to commit ahead of the BOJ and Fed," Oanda analyst Craig Erlam told AFP. London's benchmark FTSE 100 index ended the day with a gain of 0.3 percent, with Frankfurt's DAX 30 winning 0.2 percent. But in Paris, the CAC dipped 0.1 percent. On Wall Street, the S&P 500 finished up less than 0.1 percent. The Fed heads into one of its most keenly awaited gatherings after weeks of speculation that has fanned volatility across global trading floors. Most analysts now do not expect the Fed to hike rates on Wednesday, but say it could signal an increase later this year. "The probability of the Fed raising tomorrow is probably less than 20 percent, so odds are that nothing happens and I think the economic data probably is supportive of the Fed doing nothing," said Michael James of Wedbush Securities. At the same time, opinion is divided on what the Bank of Japan's intentions are, with expectations for fresh stimulus tempered by a lack of concrete promises from Tokyo, despite weak Japanese growth and almost non-existent inflation. Asian markets drifted lower, with the dollar also virtually unmoved as forex markets were also in a wait and see mode. Tokyo's Nikkei index swung to and fro through the day before ending 0.2 percent lower. Hong Kong shed 0.1 percent by the close and Shanghai lost 0.1 percent following healthy gains Monday. - Potential for volatility - "It's not unusual for traders to adopt a more cautious approach ahead of these events, particularly when we have two on the same day, both of which have the potential to create huge amounts of volatility in the markets," said Erlam. Wells Fargo bank rose 1.2 percent despite enduring tough questioning at a Senate hearing on its bogus accounts scandal. Shares of the bank fell nearly seven percent last week in the aftermath of news the bank paid $185 million in penalties for opening some two million accounts without customers' knowledge. Dow member ExxonMobil dropped 1.5 percent after the Wall Street Journal reported that US securities regulators were investigating whether it boosted its financial statements with unrealistic accounting for low oil prices and the potential impact of climate mitigation policies. In Tokyo, Japanese airbag supplier Takata tumbled 11.6 percent after a report said the company, currently looking for buyers, could be taken into bankruptcy proceedings. The firm has been hit by the global auto industry's biggest-ever safety recall over its exploding airbags. Bloomberg News said private equity firms and auto parts makers were preparing offers for the company, and some were considering the drastic bankruptcy action to mitigate the liabilities. - Key figures around 2100 GMT - New York - DOW: UP 0.1 percent at 18,129.96 (close) New York - S&P 500: UP less than 0.1 at 2,139.76 (close) New York - Nasdaq: UP 0.1 percent at 5,241.35 (close) London - FTSE 100: UP 0.3 percent at 6,830.79 points (close) Frankfurt - DAX 30: UP 0.2 percent at 10,393.86 (close) Paris - CAC 40: DOWN 0.1 percent at 4,388.60 (close) EURO STOXX 50: UP less than 0.1 percent at 2.969.89 (close) Tokyo - Nikkei 225: DOWN 0.2 percent at 16,492.15 (close) Shanghai - Composite: DOWN 0.1 percent at 3,023.00 (close) Hong Kong - Hang Seng: DOWN 0.1 percent at 23530.86 (close) Euro/dollar: DOWN at $1.1151 from $1.1175 late Monday Dollar/yen: DOWN at 101.72 yen from 101.88 yen Pound/dollar: DOWN at $1.2983 from $1.3028