World stocks struggling on US data, Fed concern

LONDON — World markets were struggling Monday after a mixed batch of indicators from the U.S., the world's largest economy.

The report from the Institute for Supply Management showed that sales in the U.S. services sector dipped and new order plunged to a four-year low in December. The impact of the survey, however, was offset somewhat by other data showing businesses stepped up spending on capital goods like machinery and computers, a promising sign for growth.

Britain's FTSE 100 ended the day flat at 6,730.73 while Germany's DAX shed 0.1 percent to 9,428.00. France's CAC-40 dropped 0.5 percent at 4,227.54. Asian indexes closed lower.

On Wall Street, the Dow Jones industrial average and the S&P 500 both fell 0.3 percent, to 16,428.67 and 1,825.98.

Looking ahead, investors are waiting to scrutinize the minutes of the Federal Reserve's December meeting, due Wednesday, amid expectations it might accelerate the pace of reducing its monetary stimulus on the back of rising economic momentum. The monthly U.S. jobs report on Friday will also be key in shaping market sentiment.

In China, trade, inflation and loans data due later in the week will color regional sentiment. Two surveys last week showed manufacturing activity has weakened in December, which analysts said pointed to a downturn in business cycle.

Analysts at Credit Agricole CIB said it was increasingly clear that China's growth has peaked and entering an economic downturn, which will hurt regional exports.

"When China sneezes, markets worry that the whole region will catch a cold," its economist Dariusz Kowalczyk said in a commentary.

In Europe, the focus will be on inflation figures on Tuesday, which could affect the European Central Bank's monthly policy meeting on Thursday. Although it is not expected to cut interest rates, it may offer more loans to banks to increase the flow of credit and help the eurozone's weak recovery.

Earlier, China's benchmark Shanghai Composite Index tumbled 1.9 percent to 2,043.01, extending losses from last week. Tokyo's Nikkei shed 2.4 percent to 15.908.88 and Hong Kong's Hang Seng fell 0.6 percent to 22,684.15. Benchmarks in Singapore, Indonesia, New Zealand and Australia also declined. However, South Korea's Kospi bucked the trend to add 0.4 percent.

In currencies, the dollar weakened, dropping 0.4 percent against the Japanese yen, to 104.39 yen. The euro rose 0.3 percent to $1.3637.

Benchmark oil for February delivery rose 26 cents a barrel to $93.70 in electronic trading on the New York Mercantile Exchange. The contract fell $1.48 to close at $93.96 on Friday.

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