Portugal Colonial - Stocks wobble as markets begin big week

Asian markets ended lower.

The Fed is widely tipped to hike borrowing costs by 0.75 percentage points Wednesday as it battles soaring inflation.

US second-quarter gross domestic product data are due Thursday, with some observers warning it could show a second successive contraction -- which is considered a technical recession.

Investors are also awaiting the release of earnings from business titans Apple, Amazon and Google parent Alphabet.

"Recent risk-on moves appear to be on thin ice as markets gear up for another bout of earnings and a crucial Fed rate decision," said market analyst Joshua Mahony at trading platform IG.

Despite the deluge of market-moving news on the calendar, European stocks had been trading higher across the board until an announcement by Russia's Gazprom that it was cutting back gas deliveries to Germany due to a faulty turbine, which pulled down the DAX index in Frankfurt.

It ended the day down 0.3 percent, while the CAC in Paris climbed 0.3 percent and London's FTSE 100 rose 0.4 percent.

"Gazprom and turbine problems aside, today's more resilient tone appears to suggest that the prospect of further economic weakness might act as a catalyst that could prompt central banks to pare back some of their more hawkish rhetoric when it comes to raising rates," said Michael Hewson at CMC Markets.

On Wall Street, both the Dow and S&P 500 were showing modest gains in late morning trade, while the tech-heavy Nasdaq Composite was lower.

Markets were roiled last week when the European Central Bank finally began ramping up interest rates to tackle runaway consumer prices in the eurozone.

The ECB had surprised investors Thursday with a bigger-than-expected rate increase of 0.5 percentage points.

Consumer prices are soaring worldwide after economies reopened from pandemic lockdowns and as the war in Ukraine keeps energy prices elevated.

That, in turn, has sparked aggressive rate hikes from major central banks to try and dampen inflationary pressures.

Federal Reserve chiefs have already said their main priority was bringing inflation down from four-decade highs, even at the expense of growth.

"We still see further downside for risky assets as recession fears accumulate and central banks remain committed to fighting inflation at the expense of growth," said Standard Chartered strategist Eric Robertsen.

Others warned that while inflation could begin to ease, the Fed could still push borrowing costs to around five percent and was unlikely to lower rates as soon as many traders hope.

- Key figures at around 1530 GMT -

New York - Dow: UP 0.3 percent at 31,996.90 points

EURO STOXX 50: UP 0.2 percent at 3,604.16

London - FTSE 100: UP 0.4 percent at 7,306.30 (close)

Frankfurt - DAX: DOWN 0.3 percent at 13,210.32 (close)

Paris - CAC 40: UP 0.3 percent at 6,237.55 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 27,699.25 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 20,562.94 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,250.39 (close)

Euro/dollar: UP at $1.0214 from $1.0213 Friday

Pound/dollar: UP at $1.2041 from $1.1999

Euro/pound: DOWN at 84.82 pence from 85.11 pence

Dollar/yen: UP at 136.70 yen from 136.12 yen

Brent North Sea crude: UP 1.7 percent at $104.90 per barrel

West Texas Intermediate: UP 1.6 percent at $96.25 per barrel

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