World stocks mostly lower as oil prices jump

BEIJING - Stocks fell on Monday ahead of a Federal Reserve meeting that’s expected to raise U.S. interest rates, while oil prices jumped after several non-OPEC countries agreed to join the cartel in cutting output.

At around 8:05 a.m. Eastern, Britain’s FTSE 100 was down 0.3 percent to 6,932, and Germany’s DAX shed 0.2 percent to 11,187. France’s CAC 40 was up 0.1 at 4,767. On Wall Street, futures for the Dow Jones industrial average was up 0.1 percent, and that the S&P 500 was down 0.1 percent. 

Investors expect Fed governors, meeting Thursday, to raise rates for only the second time in a decade. The Fed has kept rates close to zero since the 2008 global crisis, but its leaders have indicated the U.S. economy has strengthened enough to start gradually returning to normal policy.

The election of Donald Trump, who has promised tax cuts and higher spending, has raised questions about whether the Fed will delay future moves to see how that plays out. Investors are expected to look at Fed comments on the economic outlook for clues to its next move on rates.

“A quarter-point rate hike looks almost certain,” Jim O’Sullivan of High Frequency Economics said in a report. “The tone of the statement will probably be a more upbeat than last time, but we don’t expect projections to change significantly.”

OPEC, the club of major oil exporters persuaded 11 nonmembers to cut oil production, a move aimed at draining a worldwide oil glut and boosting low prices that have squeezed government finances in Russia and Saudi Arabia. OPEC said nonmembers agreed to cut 558,000 barrels per day for six months starting Jan. 1.

Those cuts come on top of an OPEC decision Nov. 30 to reduce member output by 1.2 million barrels a day. Saudi Oil Minister Khalid Al-Falih said Saturday’s deal would stabilize the market through next year and encourage industry investment. Al-Falih said the deal “is meant to accelerate the natural process of rebalancing” the oil market.

Benchmark U.S. crude surged $2.23 to $53.73 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 66 cents on Friday. Brent crude, used to price international ois, jumped $2.24 to $56.57 in London. The contract added 44 cents the previous session.  

Earlier, the Shanghai Composite Index tumbled 2.5 percent to 3,153 points, and Hong Kong’s Hang Seng lost 1.5 percent to 22,410. Tokyo’s Nikkei 225 shed 0.9 percent to 19,155, and India’s Sensex lost 0.5 percent to 26,606. Seoul’s Kospi gained 0.1 percent to 2,027, while Sydney’s S&P-ASX 200 was unchanged.

The opposition-controlled legislature passed an impeachment motion Friday against President Park Geun-hye following accusations by prosecutors that she colluded with a longtime friend to extort money and favors from South Korea’s biggest companies and gave that confidante influence over government decisions.

Prime Minster Hwang Kyo-ahn is to lead a caretaker government while a court weighs Park’s fate. Park has apologized for putting trust in her friend, Choi Soon-sil, but has denied any legal wrongdoing.

The U.S. dollar rose to 115.77 yen from Friday’s 115.29 yen. The euro also gained, to $1.060 from $1.056. The Russian ruble rose to its strongest against the U.S. dollar in over a year, thanks to the gain in the price of oil, a key Russian export. The ruble jumped 2.6 percent to be worth 60.98 against the dollar, its highest level since October 2015.