A roundup of trading on major world markets:
NEW YORK - US stocks fell sharply after Federal Reserve Chairman Ben Bernanke said the central bank expects to taper bond-buying purchases later this year.
At the closing bell, the Dow Jones Industrial Average sank 205.50 (1.34 per cent) to 15,112.73.
The broad-based S&P 500 fell 22.85 (1.38 per cent) to 1,628.85, while the tech-rich Nasdaq Composite Index tumbled 38.98 (1.12 per cent) to 3,443.20.
The Federal Open Market Committee announced that it was keeping its $US85 billion ($A90.07 billion)-a-month bond-buying program in place.
But during a news conference Bernanke said that "the committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year" if the economic outlook continues to improve.
LONDON - Europe's main stock markets pulled back in careful trade, with traders on tenterhooks before the outcome of the US Federal Reserve's latest monetary policy gathering.
"No one on the market is considering a bold position before the Fed statement," said Renaud Murail of Barclays Bourse. "It's the priority and will set the tone for what happens next."
At close in Europe and just hours before any decision from the US central bank was expected, London's benchmark FTSE 100 index dropped 0.44 per cent to stand at 6345.94 points.
Frankfurt's DAX 30 dipped 0.15 per cent to 8217.52 points and in Paris the CAC 40 shed 0.32 per cent to 3848.34 compared with Tuesday's closing levels.
Madrid's IBEX 35 index retreated 1 per cent to 8098.30 points after the release of an IMF report signalling an end to Spain's double-dip recession but still warning that more reform was needed to reverse high unemployment.
The euro rose to $US1.3404 from $US1.3396 late in New York on Tuesday.
HONG KONG - Asian markets were mostly lower, with focus on the US Federal Reserve's policy meeting later in the trading day.
But Tokyo enjoyed another rally as data showed a surge in exports thanks to a weaker yen.
Wall Street again provided a healthy cue, with investors betting the Fed will stop short of reeling in its "quantitative easing" (QE) bond-buying program.
Tokyo added 1.83 per cent, or 237.94 points, to 13,245.22.
But Seoul lost 0.65 per cent, or 12.31 points, to 1,888.31, Shanghai dropped 0.73 per cent, or 15.84 points to close at 2,143.45 and Hong Kong slipped 1.13 per cent, or 238.99 points, at 20,986.89.
WELLINGTON - The NZX 50 Index fell 16.651 points, or 0.4 per cent, to 4445.55.
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