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Asian stocks lower as investors await Fed, Europe rebounds

Asia stocks mostly lower as investors await Fed rate decision later this week, Europe rebounds

Asian stocks lower as investors await Fed, Europe rebounds

BEIJING (AP) -- Asian stock markets were mostly lower Monday as investors awaited the U.S. Federal Reserve's decision this week on raising interest rates for the first time since the financial crisis. European markets rebounded.

KEEPING SCORE: In early trading, Germany's DAX added 0.9 percent to 10,437.18 and France's CAC-40 advanced 1.1 percent to 4,602.92. Britain's FTSE 100 gained 1 percent to 6,009.46. On Friday, the DAX lost 2.4 percent, Britain's FTSE 100 dropped 2.2 percent and the CAC 40 shed 1.8 percent. Wall Street looked set for gains. Dow futures were up 0.7 percent at 17,297.00. S&P 500 futures gained 0.8 percent to 2,017.10.

FED DECISION: Investors are transfixed by the upcoming Fed announcement Wednesday on whether it will raise a key interest rate that has been held near zero since the 2008 global crisis. Low rates have helped to boost stock prices. Chairwoman Janet Yellen and other Fed officials have indicated employment, inflation and other indicators appear to be headed in the right direction to allow a hike. Analysts expect a modest increase of 0.25 percentage points to start. Yellen has said any further increases will be gradual.

ANALYST'S TAKE: "Markets are taking a bumpy route to the most awaited event of the year," said Citigroup analysts in a report. They pointed to falling commodity and crude prices, stress in credit markets and uncertainty about China. "These headwinds are likely to keep investors very cautious," they said. "While we still do not rule out a post-FOMC relief rally in risk sentiment, the lack of market liquidity, increasingly obvious growth headwinds, and the lack of global policy support will likely restrain investors' appetite to add bullish positions at this time."

ASIA'S DAY: Tokyo's Nikkei 225 sank 1.8 percent to 18,883.42 and Australia's S&P/ASX 200 retreated 2 percent to 2,928.60. South Korea's Kospi lost 1.1 percent to 1,927.87 and Hong Kong's Hang Seng shed 0.7 percent to 21,309.85. Taiwan, Singapore and Indonesia also declined. The Shanghai Composite Index gained 2.5 percent to 3,520.67 and India's Sensex was up 0.4 percent at 25,157.98.

OIL WEAKNESS: Tumbling oil prices have battered energy stocks and fueled a broader selloff. That weakness worsened when the International Energy Agency, the club of major energy-consuming economies, said oil oversupply would persist until late next year even as demand weakens. In the United States, shares of Southwestern Energy plunged 14 percent on Friday. Freeport McMoRan, a mining giant, dropped 6 percent.

JAPAN OUTLOOK: The Tankan survey of business conditions was unexpectedly strong, holding steady when forecasters expected a decline. Both manufacturing and non-manufacturing companies reported conditions were unchanged. Since Japanese manufacturers usually report weaker conditions toward the end of the year, the latest result suggests "conditions in the manufacturing sector may actually have improved this quarter allowing for seasonal distortions," said Marcel Thieliant of Capital Economics in a report.

ENERGY: Benchmark U.S. crude shed 14 cents to $35.48 per barrel in electronic trading on the New York Mercantile Exchange. On Friday, it fell $1.14 to close at $35.62. Brent crude, used to price international oils, added 4 cents to $38.37 in London. In the previous session, it plunged $1.81 to $38.32.

CURRENCY: The dollar gained to 121.27 yen from Friday's 120.96 yen. The euro weakened to $1.0962 from $1.0993.

Updated : 2021-09-23 15:21 GMT+08:00