BEIJING - Global stocks were mostly lower Monday after a U.S. Federal Reserve official suggested a September interest rate hike still was possible and weak Japanese factory activity provided more evidence of a sluggish global economy.KEEPING SCORE: In early trading, France's CAC-40 fell 1.2 percent to 4,619.91 and Germany's DAX lost 1.3 percent to 10,164.90. Wall Street looked set for losses at the open. Futures for the Dow Jones industrial average and Standard & Poor's 500 were both off 1 percent. On Friday, the Dow lost 0.1 percent and the S&P rose 0.1 percent while the Nasdaq composite gained 0.3 percent.
FED PLANS: The Fed vice chairman, Stanley Fisher said there was a "pretty strong case" for raising rates in September. That ran counter to recent market sentiment that China's economic slowdown and global market volatility might prompt the Fed to wait. Speaking at the U.S. central bank's annual gathering in Jackson Hole, Wyoming, Fisher emphasized he was not saying what action the Fed might take at its September meeting but analysts took his comments to mean he saw the economy moving close to satisfying the Fed's conditions for a hike. It would be the Fed's first reverse from its policy in place since the 2008 crisis of ultra-low rates that have pushed up stock prices.
ANALYST'S TAKE: "The Fed is still at the drawing board with regards to the specifics of the timing of a rate hike this year. But to be sure conviction for a hike this year was not watered down," said Mizuho Bank in a report. "What's more, a rate hike sooner rather than later is preferred on forward-looking inflation."
ASIA'S DAY: The Shanghai Composite Index was down by as much as 2.6 percent during the day but recovered to close down 0.8 percent at 3,205.99. The index is down more than 30 percent over the past three months despite government efforts to halt a tumble in prices. Hong Kong's Hang Seng also spent most of the day in negative territory before closing up 0.3 percent at 21,670.58. Tokyo's Nikkei 225 lost 1.3 percent to 18,890.48 and Sydney's S&P ASX 200 lost 1.1 percent to 5,207.00. India's Sensex shed 0.3 percent to 26,316.54 and Seoul's Kospi advanced 0.2 percent to 1,941.49. Taiwan, Bangkok and Jakarta rose while Singapore and New Zealand fell.
JAPAN WEAKNESS: Industrial production declined unexpectedly by 0.6 percent in July from the previous month, defying forecasts of a small increase following June's 1.1 percent rise. "The drop in industrial production in July suggests that economic activity will recover only slowly this quarter," said analyst Marcel Thieliant of Capital Economics in a report.ENERGY: Benchmark U.S. crude declined 77 cents to $44.45 per barrel in electronic trading on the New York Mercantile Exchange. The contract soared $2.66 the previous session to close at $45.22. Brent crude, used to price international oils, fell $1.06 to $48.99 per barrel in London after jumping $1.49 the previous day to $50.05.
CURRENCIES: The dollar declined to 121.17 yen from 121.38 yen on Friday. The euro rose to $1.1215 from $1.1180.