Equity markets mostly down as Fed rate-cut rally fades

TOKYO - Stock markets fell on Monday as traders took a step back following last week's rally, with Federal Reserve officials looking to temper expectations the US central bank will cut interest rates several times next year.

Investors are also keeping tabs on the Bank of Japan's meeting this week, though recent speculation that it will shift away from its ultra-loose monetary policy has faded, with observers tipping a move in the new year. 

Equities look set to end the year on a high after the Fed suggested it will begin loosening monetary policy after a string of data showed inflation coming down and the economy on course for a soft landing.

The Dow and Nasdaq hit record highs on Wall Street as tech firms surged, but the buying frenzy slowed Friday as investors took a step back, which analysts said was to be expected after the latest advances.

Asia struggled at the start of this week, with Hong Kong down one percent, while Tokyo, Shanghai, Sydney, Singapore, Mumbai, Taipei, Manila and Jakarta were also in the red.

London, Paris and Frankfurt opened lower.

Wellington, Bangkok and Singapore eked out small gains, however.