World stocks drift as investors await Fed meeting

Investors look at stock prices at a securities exchange in Shanghai on Sept. 12, 2014.

JOHANNES EISELE/AFP/Getty Images

HONG KONG - World stock markets struggled for direction Friday as investors waited for a key Federal Reserve meeting next week. Japan's benchmark edged higher as the yen plumbed a multiyear low and South Korean shares climbed after policymakers held a key interest rate steady.

France's CAC 40 slipped 0.2 percent to 4,430.96 and Germany's DAX lost 0.3 percent to 9,667.69. Britain's FTSE 100 added 0.2 percent to 6,811.51. U.S. stocks were set to open slightly lower, with Dow futures dipping 0.1 percent to 16,949.00. S&P 500 futures down 0.1 percent to 1,987.80.

Market momentum is fading and investors are struggling to find catalysts to drive stock prices higher, especially as anticipation builds that the Federal Reserve is closer to winding down its economic stimulus and raising interest rates. In the absence of major economic indicators, geopolitical tensions also weighed on investor sentiment after the U.S. announced tighter sanctions on Russia and a wider military campaign against the Islamic State group.

Japan's Nikkei 225 rose 0.3 percent to close at 15,948.29, underpinned by the weakening yen which boosts earnings of exporting companies. South Korea's Kospi rose 0.4 percent to 2,041.86 after the country's central bank kept its policy rate at 2.25 percent. Hong Kong's Hang Seng lost 0.3 percent to 24,595.32 but the Shanghai Composite Index in mainland China rose 0.9 percent to 2,331.95. Australia's S&P/ASX 200 fell 0.6 percent to 5,514.10.

The greenback is staying strong ahead of the Federal Reserve's policy meeting next week. Some investors believe the Fed will provide more clues on the timing of possible rate hikes. The dollar was at 107.22 yen, a fresh six-year high, from 107.06 late Thursday. The euro inched down to $1.2922 from $1.2925.

Investors await U.S. retail sales and University of Michigan consumer sentiment data later Friday. "We expect the two figures to come in healthy, slightly boosting market sentiment, but the market will likely remain in wait-and-see mode until the FOMC meeting next week," strategists at Credit Agricole CIB said in a research note.

Crude oil was up 74 cents to $93.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.16 to close at $92.83 on Thursday. Brent crude, a benchmark for international oils used by many U.S. refineries, slipped 60 cents to $99.46 on the ICE Futures exchange in London.