LONDON (ShareCast) - Markets opened lower on Monday as investors showed caution ahead of the Federal Reserve's monetary policy decision.
The Federal Reserve, which meets on Wednesday, said that August saw an unexpected decline in industrial production in the US, with output at mines, utilities and factories falling 0.1%, way below the median forecast expectation of a 0.3% rise.

Manufacturing output, which constitutes the 75% of total production, fell 0.4% in August, its first decline since January, following a 0.7% rise in July, which was smaller than previously estimated.

The output of the automotive industry registered its biggest drop since May 2009 and fell 7.6%, while excluding autos and parts, factory production rose 0.1%.

Despite the drop in industrial production, analysts remained positive about the US economy.

“If we can be persuaded to look though the volatility of the official data, it's evident that the US economy has continued to grow strongly in the third quarter,' said Chris Williamson, chief economist at Markit.

“The slowing in non-farm payroll growth seen in August is therefore likely to prove temporary, putting the focus of policymaking firmly on whether the economy is resilient enough to withstand a hike in interest rates earlier than the current guidance of mid-2015.'

In corporate news, SABMiller's shares rose significantly despite news that Heineken had rejected a takeover from the brewing giant, while Apple rose slightly after the company announced pre-orders for its iPhone 6 and iPhone 6 Plus topped 4m in the first 24 hours, a record for first day ordering.

According to sources cited by Reuters, Alibaba Group chose the New York Stock Exchange for its initial public offering (IPO) as the group was allegedly worried about Nasdaq's ability to handle their $21bn IPO later this month, after the exchange had mismanaged Facebook's IPO in 2012.

Yahoo, which owns 23% of Alibaba, also rose slightly, while Netflix fell after its launch on three new European markets on Monday was met with initial resistance.

Microsoft shares soared after the company announced it has reached an agreement to buy Mojang, the Sweden-based game manufacturer that produced the popular "Minecraft" video game, in a deal worth $2.5bn which is expected to be concluded by the end of the year.

The dollar rose against the pound and euro as Britain remains in a delicate situation because of the uncertainty surrounding the outcome of the Scottish independence referendum on Thursday, while the ruble hit a new low against the dollar as the latest round of sanctions began to bite.

Meanwhile, West Texas Intermediate Crude fell slightly and was trading at just under $92 a barrel.

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