NEW YORK -Asian stock markets were trading mixed early Tuesday as investors around the world anticipate the release of the U.S. Federal Reserve's latest policy statement Wednesday.
Market watchers do not anticipate any change in the benchmark Fed funds rate but they will be poring over the Fed's policy statement for any indication of when the central bank might start raising rates.
Japan's Nikkei 225 stock average fell 21 points, or 0.2 percent, to 10,731. South Korea's benchmark added 0.07 percent to 1,651.
Australian stocks rose 17 points, or 0.35 percent, to 4,801.
Investors also awaited confirmation of more support for debt-laden Greece from a meeting of European finance ministers.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
LONDON (AP) — World stock markets and the euro fell Monday as investors awaited confirmation of more support for debt-laden Greece from a meeting of European finance ministers. Worries about an overheating Chinese economy also weighed on sentiment all day.
In Europe, the FTSE 100 index of leading British shares closed down 31.80 points, or 0.6 percent, at 5,593.85 while Germany's DAX fell 41.55 points, or 0.7 percent, to 5,903.56. The CAC-40 in France ended 36.49 points, or 0.9 percent, lower at 3,890.91.
On Wall Street, the Dow Jones industrial average was down 32.04 points, or 0.3 percent, at 10,592.65 around midday New York time while the broader Standard & Poor's 500 index fell 6.78 points, or 0.6 percent, at 1,143.21.
The focus in the markets has moved back to Greece following weekend reports that the eurozone countries might provide the country with some sort of financial guarantee as it tries to tap the bond markets for more money to plug its deficit.
Greece has the unenviable task of financing around euro55 billion ($76 billion) of debt maturing this year, with euro20 billion due in April and May — the rise in Greek bond yields makes it more expensive to service the debt and that is why Greek Prime Minister George Papandreou is looking for some sort of support from eurozone partners, particularly Germany.
However, investors remain cautious ahead of a formal announcement and the euro has been hit hard, falling 0.8 percent to $1.3658.
"While the crisis in Greece has abated, it has not yet been unraveled, suggesting the possibility of further pressure on the euro going forward," said Jane Foley, research director at Forex.com.
The British pound also slid Monday as investors continued to worry about a political deadlock following the upcoming general election — opinion polls over the weekend continued to point to a so-called "hung parliament" when no one party has a majority. By late afternoon London time it was 0.9 percent lower at $1.5038 on the day.
Many investors worry that such as a situation would augur a period of instability and make dealing with the British deficit more difficult.
A warning from credit ratings agency Moody's that Britain, along with the U.S., are more likely than their triple A peers Germany and France to lose their top rating did little to inject a dose of optimism in the pound's fortunes.
Given the dearth of economic data in the early part of the week, investors are also on the lookout for any developments regarding a new banking and regulation bill in the U.S. — scheduled for Tuesday.
Investors remain unsure whether the bill will gain support from the U.S. Senate — last week financial stocks were in demand on expectations that the bill would fail to get the necessary support from the Senate. However, there are signs that many Republicans may back some sort of bill, including giving the U.S. Federal Reserve more regulatory powers.
Whatever happens on the regulatory front, the Fed will take center stage on Wednesday, when its rate-setting body issues its latest policy statement.
Though no one thinks there will be any change in the benchmark Fed funds rate from the current 0-0.25 percent, investors will be on the lookout for any changes in the statement accompanying the rate decision.
Neil Mackinnon, global macro strategist at VTB Capital, thinks the Fed will continue to make a distinction between its interest rate policy and its liquidity policy, paving the way for continued low borrowing costs.
Though the Fed will at some stage likely amend the language in the statement to signal to markets that the monetary landscape is changing especially in the light of stronger economic data, Mackinnon said the likely inclusion of Janet Yellen on to the Fed board of governors plus other candidates who are seen as dovish "is a positive for risk assets, especially equities, given that interest rate policy will remain accommodative for some time."
Earlier in Asia, Japan's Nikkei 225 stock average finished little changed at 10,751.98.
Hong Kong's Hang Seng was down 0.6 percent at 21,079.10 and South Korea's benchmark shed 0.8 percent to 1,649.50.
Elsewhere, Shanghai's market fell 1.2 percent as investors worried that the Chinese monetary authorities will accelerate their efforts to slow the economy to keep a lid on inflationary pressures.
"With little else to lift the mood this weighed on the market all day," said Anthony Grech, market strategist at IG Index.
Oil prices dropped below $80 a barrel, with benchmark crude for April delivery down $1.65 to $79.59 a barrel.
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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
