Global stock markets fall ahead of Fed meeting
Global stock markets fall as traders await results of Federal Reserve policy meeting
A man looks at an electronic stock board of a securities firm in Tokyo, Monday, July 29, 2013. Asian stock markets fell Monday as traders await a packed schedule of data releases this week in the U.S. and a key meeting of the Federal Reserve. Japan's benchmark Nikkei 225 dropped 2.5 percent to 13,766.09 as the yen continued to reverse from its recent fall. (AP Photo/Koji Sasahara)
BANGKOK (AP) -- Global stock markets fell Monday, led by a sharp dive in Japan, as traders awaited a packed schedule of economic data releases this week in the U.S. and a key meeting of the Federal Reserve.
Japan's benchmark Nikkei 225 sank 3.3 percent to 13,661.13, its first close below 14,000 since July 1, as the yen continued to reverse some its recent fall. Linus Yip, strategist at First Shanghai Securities in Hong Kong, said the Nikkei's sharp decline sparked jitters elsewhere in Asia. He added that slowing growth in China presented an additional reason for caution.
South Korea's Kospi fell 0.6 percent to 1,899.89, hurt by losses among technology shares. Hong Kong's Hang Seng lost 0.5 percent to 21,850.15. On the Chinese mainland, the Shanghai Composite Index shed 1.7 percent to 1,976.31 while the smaller Shenzhen Composite Index lost 1.9 percent to 941.33.
European stocks were mixed in early trading. Britain's FTSE 100 shed 0.4 percent to 6,563.21. But Germany's DAX rose 0.3 percent to 8,266 and France's CAC-40 gained 0.2 percent to 3,979.31. Wall Street appeared set for losses, with Dow Jones industrial futures falling 0.2 percent to 15,460 and S&P 500 futures shedding 0.3 percent to 1,681.80.
Analysts expect to see a drop in unemployment when the U.S. Labor Department releases employment figures for July at the end of the week, but some say it will not be enough to prompt an immediate scaling back of the Fed's bond-buying program, which has been helping to buoy the economy.
Traders have been cautious in recent days ahead of the Fed's two-day meeting, which begins Tuesday, for hints of when the central bank will start reducing its monetary stimulus.
"Our guess is that it won't happen until December and it could be delayed further yet," said analysts at DBS Bank Ltd. in a report.
Since late last year, the Fed has been buying $85 billion in Treasury and mortgage bonds a month in a move that has kept long-term rates near record lows and supported economic recovery.
Among individual stocks, Korean Air Lines Co. fell 6.5 percent while Australia-based uranium miner Paladin Energy Ltd. sank 10.1 percent.
Japanese vehicle makers were among the hardest hit stocks of the day. Mitsubishi Motors Corp. plunged 9.9 percent. Isuzu Motors Ltd. dropped 8 percent.
Global stocks mostly dropped Friday on concerns that a brusque overhaul of China's industry could slow down the world's second-largest economy. Beijing has ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars. The industry ministry ordered more than 1,400 companies to cut excess capacity and even some companies to close outright.
In energy trading, benchmark crude was down 52 cents to $104.18 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to close at $104.70 Friday in New York.
The dollar fell to 97.93 yen from 98.32 yen late Friday. The euro rose to $1.3284 from $1.3270.
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