RIO Rio Tinto Plc

Global stocks fell on Friday as a rally following the U.S. Federal Reserve's decision to raise its benchmark interest rate showed further signs of fading.

The Stoxx Europe 600 was down 0.4% in early trade after rising 1.2% in the previous session.

Most Asian bourses were little changed. The exception was Japan, where stocks closed sharply lower after the Bank of Japan announced additional easing measures.

Wall Street snapped a three-day winning streak on Thursday as a strengthening dollar and oil stockpile data pressured U.S. oil prices and energy shares.

Brent crude was up 0.5% at $37.24 a barrel, but prices remain near multiyear lows.

Global stocks initially rose sharply following the Fed's decision late Wednesday to raise interest rates for the first time in almost a decade. Investors responded positively to the vote of confidence in the world's largest economy and reduced uncertainty about the central bank's plans.

But the upbeat mood was short-lived as investors have shifted their attention back to weakness in commodities markets.

Gains in stocks after the Fed's move were "knee-jerk," said Alastair George, chief strategist at Edison Investment Research. He said investors "need to be cautious on chasing the Fed's confidence in the economy, because there are real issues that could lead the Fed to change its mind."

For a sustainable rally in equity markets, there needs to be better momentum in company earnings, Mr. George said.

In European equities, losses were led by the technology and chemicals sectors. German conglomerate BASF SE fell 1.1%.

Despite broader losses, miners saw some respite. BHP Billiton PLC was up 1.9% and Rio Tinto PLC was up 1.1%.

In Asia, The Shanghai Composite Index was down less than 0.1% and Australia's S&P/ASX 200 added 0.1%.

Japanese stocks were volatile after the Bank of Japan said it would bolster its nearly three-year-old quantitative easing program. The BOJ said it would maintain its overall target of annual asset purchases, but would lengthen the average maturity of the Japanese government bonds it purchases and start a new program of buying exchange-traded funds.

The Nikkei Stock Average surged more than 2% immediately after the announcement, but quickly turned negative and ended down 1.9%.

In currencies, the dollar was down 0.7% against the yen at ¥ 121.7390, while the euro was down 0.2% against the dollar at $1.0809. The yuan pared losses after its longest selling streak against the dollar since 2005.

Gold was up 0.6% at $1,055.20 a troy ounce after falling Thursday.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

December 18, 2015 04:55 ET (09:55 GMT)

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