Volkswacht Bodensee - Stocks diverge ahead of expected US rate cut

Equities have enjoyed a strong run-up over recent weeks as a string of data on jobs and inflation are seen as having provided the US central bank with enough leeway to resume its rate reductions.

Wednesday's policy decision follows figures showing the labour market continuing to soften, while prices have not spiked as much as feared in the wake of US President Donald Trump's tariff war.

The keenly awaited meeting is expected to see the Fed lower borrowing costs 25 basis points, although some observers predict it could go to 50 points.

"There’s a wait and see mood at the start of the week as investors eye key central bank meetings and assess the potential path of interest rate cuts," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The central banks of Canada, Britain and Japan are due to meet this week.

Paris and Frankfurt stock markets advanced in midday trading on Monday, while London was flat.

Asia fluctuated after a tepid Friday on Wall Street that saw the Nasdaq inch up to a new peak.

Shanghai edged down after data showed further weakness in China's economy, with growth in retail sales and industrial production much slower than forecast.

Seoul hit another record after South Korean officials scrapped a plan to lower the capital gains tax threshold for stock investors.

Hong Kong advanced, while Tokyo was closed for a holiday.

Also in view are talks between China and the United States in Madrid that will cover a range of issues including trade, with an eye on a November deadline for their tariff pause.

US Treasury Secretary Scott Bessent said Monday the United States is "very close" to a deal with China to settle their dispute over TikTok.

The meetings are expected to continue through Wednesday -- the deadline for TikTok to find a buyer or face a ban.

The negotiations come after China launched two investigations into the US semiconductor sector on Saturday.

In company news, Hong Kong-listed Pop Mart, which makes the global smash Labubu dolls, tanked more than six percent, wiping billions off its valuation, after JP Morgan downgraded it saying it was overpriced.

The firm is up around 180 percent this year but is down more than a fifth from its August record owing to signs demand for the dolls is waning.

And in Sydney, ANZ bank, one of Australia's "big four" lenders, retreated following news it had agreed to pay a record fine of Aus$240 million (US$159.5 million) over "widespread misconduct".

- Key figures at around 1050 GMT -

London - FTSE 100: FLAT at 9,284.41 points

Paris - CAC 40: UP 1.1 percent at 7,914.17

Frankfurt - DAX: UP 0.4 percent at 23,792.03

Tokyo - Nikkei 225: Closed for a holiday

Hong Kong - Hang Seng Index: UP 0.2 percent at 26,446.56 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,860.50 (close)

New York - Dow: DOWN 0.6 percent at 45,834.22 points (close)

Euro/dollar: UP at $1.1756 from $1.1731 on Friday

Pound/dollar: UP at $1.3606 from $1.3560

Dollar/yen: DOWN at 147.35 from 147.67 yen

Euro/pound: DOWN at 86.40 pence from 86.52 pence

West Texas Intermediate: UP 0.2 percent at $62.82 per barrel

Brent North Sea Crude: UP 0.1 percent at $67.09 per barrel

D.Schlegel--VB