World markets mixed as investors eye Fed
BEIJING - Asian stocks were mixed and Europe rose Monday after China reported weak factory output while investors looked ahead to this week's U.S. Federal Reserve decision on interest rates.
In early trading, France's CAC-40 gained 0.6 percent to 4,578.49 and Germany's DAX advanced 0.6 percent to 10,184.42. Britain's FTSE 100 rose 0.6 percent to 6,154.44. Wall Street was set for a muted open: Dow futures were nearly unchanged and S&P 500 futures gained 0.2 percent.
Factory output in August grew by a disappointing 6.1 percent, prompting expectations of new stimulus for the cooling economy. Analysts said even the level reported was due to comparison with an unusually weak period a year earlier. That came after August exports fell 5.5 percent. The latest data "do cast doubts over the underlying strength of industrial activity," said UBS in a report.
Traders were focused on Thursday's Federal Reserve meeting, which may raise interest rates for the first time since 2008 or hold off but signal intent to tighten access to credit. Some analysts suggest China's economic weakening and uncertainty about U.S. inflation might prompt the Fed to postpone action. But the Fed deputy chairman, Stanley Fisher, said two weeks ago he still saw a "pretty strong case" for raising rates.
"Trader thinking this week will be dominated by Thursday morning's Fed decision. Although we are now only four days out from the decision, there is little sign of a market consensus developing, either on what the Fed will do or on how markets will react if they do lift rates," said Ric Spooner of CMC Markets in a report. "Any unexpected results on this week's release of U.S. retail sales, industrial production or CPI data could influence thinking on the Fed decision and roil markets."
The Shanghai Composite Index fell 2.7 percent to 3,114.80 and Tokyo's Nikkei 225 lost 1.6 percent to 17,965.70. Hong Kong's Hang Seng added 0.3 percent to 21,561.90 and Australia's S&P/ASX 200 advanced 0.5 percent to 5,096.50. South Korea's Kospi lost 0.5 percent to 1,931.46. Singapore and Bangkok also declined. India's Sensex added 0.6 percent to 25.771.06.
Benchmark U.S. crude fell 26 cents to $44.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.29 on Friday to close at $44.63. Brent crude, used to price international oils, declined 64 cents to $49.25 in London. It lost 84 cents in the previous session to close at $49.89.
The dollar weakened to 120.17 yen from Friday's 120.58 yen. The euro edged up to $1.1340 from the previous session's $1.1335.