Global stocks drift as oil price sinks again and Fed looms

LONDON — Global stock markets drifted lower Monday as oil prices fell further and investors awaited the U.S. Federal Reserve's expected decision this week to raise interest rates for the first time in around 9 ½ years.

KEEPING SCORE: In Europe, Germany's DAX was down 0.6 percent to 10,278 while France's CAC-40 fell 0.2 percent to 4,540. The FTSE 100 index of leading British shares was flat at 5,954. U.S. stocks were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.1 percent.

FED DECISION: Investors are transfixed by the upcoming Fed announcement Wednesday on whether it will raise a key interest rate that has been held near zero since the 2008 global crisis. Low rates have helped to boost stock prices. Chairwoman Janet Yellen and other Fed officials have indicated employment, inflation and other indicators appear to be headed in the right direction to allow a hike. Analysts expect a modest increase of 0.25 percentage points to start. Yellen has said any further increases will be gradual.

ANALYST TAKE: "Wednesday's potentially momentous Fed meeting now squarely in everyone's sights, most will take the opportunity to sit and await developments," said Chris Beauchamp, senior market analyst at IG.

OIL WEAKNESS: Traders are also assessing the impact of tumbling oil prices, which have battered energy stocks and fueled the broader stock market sell-off. The benchmark New York rate was down a further 94 cents at $34.68 a barrel while Brent, the international standard, fell $1.43 to $36.89.

JAPAN OUTLOOK: The Tankan survey of business conditions was unexpectedly strong, holding steady when forecasters expected a decline. Both manufacturing and non-manufacturing companies reported conditions were unchanged. Since Japanese manufacturers usually report weaker conditions toward the end of the year, the latest result suggests "conditions in the manufacturing sector may actually have improved this quarter allowing for seasonal distortions," said Marcel Thieliant of Capital Economics in a report.

ASIA'S DAY: Tokyo's Nikkei 225 sank 1.8 percent to 18,883.42 and Australia's S&P/ASX 200 retreated 2 percent to 2,928.60. South Korea's Kospi lost 1.1 percent to 1,927.87 and Hong Kong's Hang Seng shed 0.7 percent to 21,309.85. Taiwan, Singapore and Indonesia also declined. The Shanghai Composite Index gained 2.5 percent to 3,520.67 and India's Sensex was up 0.4 percent at 25,157.98.

CURRENCIES: The euro fell 0.2 percent to $1.0969 while the dollar fell 0.2 percent to 120.77 yen.