Volkswacht Bodensee - Stock markets largely retreat, oil climbs

Equities have come under pressure in recent weeks on bets that the US central bank will need to stick with its tightening bias well into next year as prices remain well above target, while the world's biggest economy and its labour market remain in rude health.

Comments from monetary policymakers will be pored over in the coming days, with traders hoping for some insight into their thinking as speculation grows that borrowing costs will be lifted again before the end of the year.

The prospect of higher rates -- and fewer cuts than hoped next year -- dented sentiment on trading floors, and dragged Wall Street into the red Friday.

Major Asian stock markets joined European indices in sliding on Monday, though Tokyo climbed.

A recent spike in oil prices to 10-month highs above $90 a barrel is adding to the headache for central bankers, with observers warning the commodity could push above $100 owing to an output cut by Saudi Arabia and Russia.

"Sentiment still remains fragile with higher-for-longer messages (on interest rates) reverberating through the markets," said Redmond Wong at Saxo Capital Markets.

He added that buying could be subdued also by the possibility of a US government shutdown and the ongoing strike by the United Auto Workers.

There was little initial reaction to news that the United States and China had set up two working groups on economic and financial policy as they look to stabilise relations.

The Economic Working Group will discuss macroeconomic issues, while the Financial Working Group will focus on regulatory and financial stability issues, a senior US Treasury Department official said.

In Hong Kong, worries about China's property sector returned as shares in struggling developer China Evergrande tumbled about 25 percent after it called off a creditor meeting and said it had scrapped a planned restructuring.

Ahead of the Wall Street reopen, Amazon said it would invest up to $4 billion in AI firm Anthropic, as the online retail giant steps into a race centred on artificial intelligence and dominated by Microsoft, Google and OpenAI.

- Key figures around 1100 GMT -

London - FTSE 100: DOWN 0.7 percent at 7,632.86 points

Frankfurt - DAX: DOWN 0.7 percent at 15,447.10

Paris - CAC 40: DOWN 0.6 percent at 7,145.17

EURO STOXX 50: DOWN 0.7 percent at 4,179.47

Tokyo - Nikkei 225: UP 0.9 percent at 32,678.62 (close)

Hong Kong - Hang Seng Index: DOWN 1.8 percent at 17,729.29 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,115.61 (close)

New York - Dow: DOWN 0.3 percent at 33,963.84 (close)

Euro/dollar: DOWN at $1.0640 from $1.0647 on Friday

Pound/dollar: DOWN at $1.2238 from $1.2240

Dollar/yen: UP at 148.61 yen from 148.36 yen

Euro/pound: DOWN at 86.93 pence from 86.96 pence

Brent North Sea crude: UP 0.3 percent at $93.51 per barrel

West Texas Intermediate: UP 0.2 percent at $90.19 per barrel

C.Kreuzer--VB