Global stocks drifted lower on Tuesday as investors looked to the Federal Reserve’s policy meeting for an expected interest rate increase and hints on future hikes. Britain’s pound fell after the country’s parliament cleared the way for Britain to start its exit process from the European Union.
Britain’s FTSE 100 shed 0.1% to 7,358 while France’s CAC 40 fell 0.6% to 4,968. Germany’s DAX lost 0.3% to 11,948. Futures augured a tepid start on Wall Street with Dow futures down 0.3% and S&P futures shedding 0.4%, AP reported.
The Fed is scheduled to hold a policy meeting from Tuesday to Wednesday. Most investors expect it to raise rates for only the third time since they went to nearly zero during the financial crisis in 2008. With strong economic reports in recent weeks, expectations that the Fed may stand pat this month have changed. Investors will also be keeping an eye on the Fed’s outlook for more rate hikes this year.
The Bank of England, Bank of Japan and other central banks are also holding meetings this week. Many economists expect the Bank of England to hold steady. The British government, meanwhile, has been cleared by parliament to formally begin the process of exiting the EU. It is not expected to do so for another couple of weeks, but the prospect has pushed the pound down 0.6% to $1.2141. The Netherlands has its own election this week, where politicians have also railed against the EU and immigrants.
Japan’s Nikkei 225 fell 0.1% to 19,609.50 but South Korea’s Kospi rose 0.8% to 2,133.78. India’s Sensex gained 1.6% to 29,401.19. India’s NSE Nifty 50 Index surged to a record and the rupee climbed to an 11-month high after Prime Minister Narendra Modi’s victory in state elections. Hong Kong’s Hang Seng closed flat at 23,827.95. The Shanghai Composite Index added 0.1% to 3,239.33. Australia’s S&P/ASX 200 also was steady at 5,759.10. Stocks in Taiwan were higher and in Southeast Asia, markets were mixed.
The dollar edged up to 114.89 yen from 114.88 yen while the euro slipped to $1.0628 from $1.0653.
Benchmark US crude oil fell 77 cents to $47.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents on Monday. Brent crude, which is used to price international oils, dropped 69 cents to $50.66 a barrel.