Global stocks lower amid worries about possible US rate hike, weak Chinese growth and Scotland

Markets Associated Press

Global stocks sank Wednesday under the weight of worries about the possible timing of a U.S. rate hike, economic weakness in China and an impending referendum on Scottish independence.

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KEEPING SCORE: France's CAC-40 shed 0.4 percent to 4,436.64 and Germany's DAX lost 0.7 percent to 9,639.44. Britain's FTSE 100 shed 0.4 percent to 6,801.01. Wall Street looked set for more losses, with futures for the Dow Jones industrial average and the broader Standard & Poor's 500 both off 0.2 percent. On Tuesday, the Dow suffered its biggest one-day decline in a month.

THE FED: Investors are looking more closely at the U.S. Federal Reserve and whether it might raise its benchmark interest rate sooner than expected. In a paper this week, two San Francisco Fed economists said the public appears to expect a "more accommodative policy" than Fed board members. With the Fed's Open Market Committee due to meet next week, Mizuho Bank warned "markets may be overlooking the risks that the Fed raises its key rate earlier" than expected.

CHINA'S STRUGGLE: Growth is under pressure after manufacturing activity decelerated in August and imports unexpectedly shrank by 2.4 percent in a reflection of sluggish domestic demand. The top economic official, Premier Li Keqiang, said Tuesday that growth was still on track despite "short-term fluctuations," according to the official Xinhua News Agency.

THE QUOTE: "Global equities have retreated with the wall of worry across major economies sending investors into a cautious mode. There are a number of key issues plaguing sentiment at the moment, including a more hawkish Fed, a struggling China economy, the Scottish referendum and potential hiccups for the ECB's stimulus plans," said strategist Stan Shamu of IG Markets in a report.

ASIA'S DAY: China's Shanghai Composite Index declined 0.3 percent to 2,318.31 and Sydney's S&P/ASX 200 lost 0.6 percent to 5,574.30. India's Sensex shed 0.6 percent to 27,097.57. Hong Kong's Hang Seng fell 1.9 percent to 24,705.36 and Southeast Asian markets also fell. Tokyo was the only major market to buck the trend, with its Nikkei 225 rising 0.3 percent to 15,788.78 as dollar hit a fresh six-year high against the yen.

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BREAK-UP JITTERS: British markets have been unnerved by the possibility Scotland might sever its centuries-old union with Britain in an independence referendum next week. Secession could hit Britain's trade balance and dent its income from oil reserves that could revert back to Scotland. The pound fell more than one percent Monday after a poll showed a narrow majority in favor of independence for the first time.

ENERGY: Benchmark U.S. crude was off 21 cents at $92.54 in electronic trading on the New York Mercantile Exchange amid expectations of ample supplies and weak demand that have pushed prices down in recent days. Concern about a possible disruption in Russian supplies due to conflict in Ukraine have faded. The contract gained 9 cents the previous session to close at $92.75. Brent crude, used to price international oils, shed 21 cents to $98.95 after falling $1.04 to $99.16 the previous session.

CURRENCIES: The dollar rose to 106.74 yen from the previous day's 106.17. The euro dropped to $1.2933 from $1.2942.