BANGKOK—Shares were mostly lower in Europe and Asia on Monday after Wall Street logged its worst week since the pandemic began in 2020.
Shares fell in Paris, London, and Frankfurt but rose in Tokyo. Shanghai was little changed.
Investors have been growing increasingly worried about how aggressively the Federal Reserve, which holds a policy meeting this week, might act to cool rising inflation.
Historically low interest rates, dubbed quantitative easing, or QE, have helped support the broader market as the economy absorbed a sharp hit from the pandemic in 2020 and then recovered over the last two years.
“The FOMC (Fed) meeting dominates the macro calendar this week and is likely to keep risk sentiment on the hesitant side with an end to QE and imminent rates hikes likely to be announced,” economists Nicholas Mapa and Robert Carnell of ING said in a commentary.
Germany’s DAX shed 1.1 percent to 15,431.03 while the CAC 40 in Paris gave up 1.4 percent to 6,971.19. In London, the FTSE 100 fell 0.7 percent to 7,447.03. The futures for the S&P 500 and the Dow industrials gained 0.3 percent.
Some economists believe the Fed and other central banks need to move faster to tamp down surging prices by raising rates. U.S. consumer prices rose 7 percent in December compared to a year earlier, the biggest increase in nearly four decades.
Rising costs are raising concerns that consumers will start to ease spending because of the persistent pressure on their wallets. At the same time, outbreaks of the omicron variant of the coronavirus are threatening to slow recoveries from the crisis.
Tokyo’s Nikkei 225 index edged 0.2 percent higher to 27,588.37.
Shares in electronics and energy giant Toshiba Corp. fell 1.6 percent after the company said it was suspending production at a factory in southern Japan that makes semiconductors for vehicles and machinery after a strong earthquake hit the region.
The Hang Seng in Hong Kong shed 1.2 percent to 24,656.46. In Australia, the S&P/ASX 200 lost 0.5 percent to 7,139.50 and India’s Sensex dropped 2.7 percent to 57,419.98.
South Korea’s Kospi dropped 1.5 percent to 2,792.00 on heavy selling of big technology companies like Samsung and LG Chemical. Thailand’s SET lost 0.7 percent.
The Shanghai Composite index gained less than 0.1 percent, to 3,524.11.
On Friday, the benchmark S&P 500 sank 1.9 percent to 4,397.94, falling 5.7 percent for the week in its worst weekly loss since March 2020.
The tech-heavy Nasdaq composite index dipped 2.7 percent to 13,768.92. It has fallen for four straight weeks and is now more than 10 percent below its most recent high, putting it in what Wall Street considers a market correction.
The Dow Jones Industrial Average fell 1.3 percent to 34,265.37.
With investors expecting the Fed to begin raising rates as soon as its March policy meeting, costly shares in tech companies and other expensive growth stocks now look relatively less attractive.
Treasury yields have fallen as investors turn toward safer investments. The yield on the 10-year Treasury slipped to 1.73 percent from 1.76 percent on Friday.
The Fed’s benchmark short-term interest rate is currently in a range of 0 percent to 0.25 percent. Investors now see a nearly 70 percent chance that the Fed will raise the rate by at least one percentage point by the end of the year, according to CME Group’s Fed Watch tool.
In other trading, U.S. benchmark crude oil gained 21 cents to $85.35 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 41 cents to $85.14 per barrel on Friday.
Brent crude, the basis for pricing international oils, added 26 cents to $88.15 per barrel.
The U.S. dollar fell to 113.62 Japanese yen from 113.68 yen. The euro slipped to $1.1327 from $1.1346.
By Elaine Kurtenbach