World markets mixed ahead of Fed rates decision

Business

FILE – An American flag flies over the Federal Reserve building on May 4, 2021, in Washington. (AP Photo/Patrick Semansky, File)

BEIJING (AP) — World stock markets were mixed on Monday ahead of what is expected to be a Federal Reserve decision this week to raise interest rates again amid investor hopes the U.S. central bank will scale back plans for more increases.

Germany’s DAX gained 0.2% to 13,269.55 and Britain’s FTSE 100 was flat at 7,049.25. In Paris, the CAC 40 lost 0.2% to 6,262.91. The future for the S&P 500 shed 0.6% while that for the Dow industrials was 0.5% lower.

Wall Street ended last week higher after Apple and other big companies reported strong profits and a closely watched measure of inflation accelerated in September.

The Fed is widely expected at this week’s meeting to announce another rate hike of 0.75 percentage points, three times its usual margin. Investors are looking for signs officials are satisfied that earlier increases imposed to cool inflation that is near a four-decade high are working and future increases can be smaller.

Investors worry rate hikes by the Fed and other central banks to cool inflation might tip the global economy into recession. The U.S. central bank has raised its benchmark lending rate to a range of 3% to 3.25% from close to zero in March.

“The tone from Fed Chair Jerome Powell will be important” after this week’s meeting, said Yeap Jun Rong of IG in a report. Investors are looking for “increased concerns on economic conditions” instead of the “current head-on resolve to tame inflation.”

In Asian trading, the Nikkei 225 in Tokyo gained 1.8% to 27,587.46, as the government reported that retail sales rose in September, though industrial production weakened.

The Shanghai Composite Index shed 0.8% to 2,893.48 after a manufacturing survey showed a weakening in production and demand. Hong Kong’s Hang Seng dropped 1.2% to 14,687.02.

The Kospi in Seoul added 1.1% to 2,293.61 and Sydney’s S&P-ASX 200 gained 1.2% to 6,863.50.

On Wall Street, the benchmark S&P 500 index rose 2.5% on Friday after U.S. government data showed consumer prices rose 6.2% over a year earlier September, the same as the previous month’s rate.

The Dow Jones Industrial Average rose 2.6% and the Nasdaq composite climbed 2.9%.

Core inflation, which removes volatile food and energy prices to show the underlying trend, accelerated to 5.1% from August’s 4.9%. Powell and other Fed officials have said they are ready to keep interest rates elevated until they are sure inflation is extinguished.

Also Friday, government data showed wage increases for American workers were in line with expectations. Powell has cited wages as one measure the Fed is watching as it decides whether to raise rates.

In energy markets Monday, benchmark U.S. crude lost 66 cents to $87.24 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.18 to $87.90 on Friday. Brent crude, used to price international oils, retreated 65 cents to $93.12 per barrel in London. It declined $1.19 on Friday to $95.77.

The dollar rose to 148.27 yen from Friday’s 147.53 yen. The euro edged down to 99.35 cents from 99.55 cents.

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