World shares fall ahead of Fed
TOKYO - World stock markets were lower Tuesday after China's benchmark suffered a late session sell-off and the Bank of Japan kept its monetary policy unchanged ahead of a much anticipated U.S. Federal Reserve decision later this week on whether to raise interest rates.
Britain's FTSE 100 fell 0.3 percent to 6,064.29 and France's CAC40 lost 0.5 percent to 4,524.97. Germany's DAX edged 0.1 percent higher to 10,141.71. Prospects for Wall Street were cloudy, with both Dow and S&P futures essentially unchanged.
Japan's central bank issued a statement saying it had not changed its policy calling for 80 trillion yen ($666 billion) in annual asset purchases by the central bank, to help spur inflation and stimulate growth. A small minority of experts had speculated the BOJ could spring a surprise increase in its asset purchases to combat recent recurring signs the recovery is faltering. The central bank said the economy was still in a "moderate recovery," but said exports and production were affected by slowing growth in emerging markets.
"Speculation remains rife that China and Japan are moving closer to more fiscal stimulus," DBS said in a research note. "It is unclear what course of action by the Fed would be better for sentiment. With sentiment staying sour, signals of a delayed rate hike may perversely lead to further worries about the global economy."
Investors are look ahead to the Federal Open Market Committee meeting later this week. Opinions are split over whether the Fed will raise its benchmark interest rate at the end of its two-day meeting on Thursday though the consensus has shifted closer to no rate hike in the past week. China's slower economy and recent turbulence in financial markets are being balanced against continued growth in U.S. employment.
Japan's Nikkei 225 rose 0.3 percent to 18,026.48 and South Korea's Kospi edged 0.3 percent higher to 1,937.56. Hong Kong's Hang Seng fell 0.5 percent to 21,455.23. Australia's S&P/ASX 200 lost 1.5 percent to 5,018.40. China's Shanghai Composite Index fell 3.5 percent to 3,005.17. Shares were also lower in Singapore, Taiwan, Indonesia and New Zealand.
U.S. crude gained 37 cents to $44.37 a barrel in electronic trading on the New York Mercantile Exchange. It lost 63 cents to close at $44.00 a barrel on Monday. Brent Crude, a benchmark for international oils, gained 26 cents to $48.51. It lost $1.77 on Monday to close at $46.25 a barrel in London.
The dollar fell to 119.51 yen from 120.30 yen late Monday. The euro was nearly flat at $1.1308 from $1.1309.