* Wall St poised to open at high, European stocks upbeat
* Fed hike almost certain, all eyes on signals for further
* Sterling weaker on UK wages disappointing, govt delays
* U.S. oversupply hurts oil prices again
By Vikram Subhedar
LONDON, June 14 Stocks rose on Wednesday, but
worries about stretched valuations and caution before a
near-certain rate hike by the U.S. Federal Reserve kept their
gains in check, while the dollar steadied against a basket of
On Wall Street, the S&P 500 was poised to open at a record
high with futures up 0.1 percent. Futures on the
tech-heavy Nasdaq rose 0.2 percent as the sector
continues its recovery from last week's selloff.
For now, all eyes are on the Fed.
The widely expected quarter-point interest rate hike will
take the Fed funds target rate above 1 percent for the first
time since the immediate aftermath of the collapse of Lehman
Brothers in 2008.
Market participants' focus will be on signals on the
frequency of further hikes and how the Fed plans to unwind its
huge Treasury bond stockpile over the years ahead.
The U.S. central bank is scheduled to release its decision
at 1800 GMT on Wednesday with a news conference to follow from
Chair Janet Yellen.
"With financial conditions remaining supportive ... and US
financials breaking higher, the Fed may see little reason to
moderate its rate hike projections when meeting today,"
strategists at Morgan Stanley said in a note to clients.
The U.S. bank expects the dollar to gain 2 percent against
major currencies over the next few weeks.
On Wednesday, the dollar index barely budged as
slightly firmer moves against the euro and yen
were offset by losses against the commodity bloc of currencies,
such as the Australian and Canadian dollars.
Worries about the pace of global growth and weakness in
markets for the commodities they produce drove a 5-percent slide
in the values of both Australia's and Canada's
dollars between March and May.
Relatively upbeat economic data from China and a surge in
expectations of higher Canadian interest rates have helped
currencies of commodities-related economies.
In the UK, disappointing wage growth data and a report that
a deal needed to form a new government could be delayed until
next week hurt sterling, which gave up early gains.
The pound had been recovering from its almost 3 percent
slide since Prime Minister Theresa May unexpectedly lost her
parliamentary majority in a national election last Thursday.
"One of the things we thought was very positive for sterling
was that we'd extended the life of the parliament to give a very
large window after the end of the two-year negotiation period
(on Brexit)," said Adam Cole, head of G10 currency strategy with
RBC in London.
"That no longer looks like the case."
Optimism about the euro zone economy continued to underpin
European equities, however, where the pan-European STOXX 600
was up 0.6 percent, led by industrials and financials.
However, worries about equity valuations, particularly in
the tech sector which nosedived last week, are creeping up among
A record number of investors believes equities are
overvalued and three-quarters say internet stocks are expensive
or in a bubble, a Bank of America Merrill Lynch fund manager
poll showed on Tuesday
Strategists at Deutsche Bank warned that its European
"complacency indicator", which measures valuations relative to
market volatility, was at an 11-year high, and the bank expects
economic momentum to fade in coming months.
Europe's benchmark bond yield held near seven-week lows
ahead of the Fed decision.
In commodities, oil prices fell about 1 percent, on the
backfoot again on worries about US oversupply. Brent crude oil
was down 44 cents a barrel at $48.28 while U.S. crude
was 55 cents lower at $45.92.
(Additional reporting by Ritvik Carvalho; Editing by Andrew
Heavens and Gareth Jones)