BANGKOK -- World markets were mixed Monday as Japan continued its struggle to stabilize a leaking nuclear reactor and a fierce rebellion in Libya against leader Moammar Gadhafi dragged on.

Oil prices fell below $105 a barrel in Asia as momentum shifted toward rebels, backed by Western military powers, who are fighting to overthrow the regime in OPEC-member Libya. In currencies, the dollar strengthened against the yen and the euro as expectations mounted the U.S. Federal Reserve will raise interest rates later this year.

In early European trading, Britain's FTSE 100 rose 0.2% to 5,915.00 and Germany's DAX was up 0.4% at 6,975.33. France's CAC-40 rose 0.3% to 3,983.52.

Wall Street was set to head higher, with Dow Jones Industrial Average futures up 25 points to 12,194 and S&P 500 futures 3 points higher to 1,313.

Shares in Asia -- where the ripple effects of the monstrous earthquake that struck Japan earlier this month are felt more keenly -- ended the day mostly lower. Tokyo's benchmark Nikkei 225 dropped 0.6% to 9,478.53, weighed down by the failure to regain control of Japan's stricken nuclear complex.

The Fukushima Dai-ichi complex has been leaking radiation since a mammoth earthquake and tsunami on March 11 decimated the country's northeastern coast. Shares of Tokyo Electric Power , which operates the plant, have been in a tailspin since the disaster. On Monday, TEPCO shares lost 17.7%.

Japan's powerhouse auto industry still faces huge challenges, with electricity supplies intermittent and key parts suppliers knocked out by the quake. Goldman Sachs estimated the shutdowns are costing the Japan automakers $200 million a day.

Shares in the major car makers have been volatile as they try to restore production to pre-quake levels. Monday was bargain-hunting day, with Nissan ( NSANY) jumping 3.5% and Honda ( HMC) up 2.1%. Toyota ( TM), the world's largest automaker, rose 0.6%, as some operations were due to resume.

Hong Kong's Hang Seng index shed 0.4% to 23,068.19. Among the most actively traded shares was China Construction Bank, which dropped 2.6% after the state-owned lender reported that profit growth last year was below analysts' expectations. Profit rose 26% to 135 billion yuan ($20.5 billion), short of the 137 billion yuan analysts were forecasting.

South Korea's Kospi eked out a 0.1% gain to 2,056.39, despite a decline in business sentiment. The monthly Business Survey Index, a survey of the 600 largest businesses, dived to 99.3 from 113.5 a month ago, Yonhap news agency said. Readings under 100 mean pessimists outnumber optimists.

The military conflict in Libya, which has brought oil production in the North African country to a standstill, was also weighing on sentiment. The Korea International Trade Association said last week that the country could lose more than $800 million in exports to Libya alone this year if the war continues until the end of the year.

Australia's S&P/ASX 200 fell 0.2% to 4,733.60, and benchmarks in Singapore, Taiwan, and Indonesia were also lower, while those in the Philippines and New Zealand rose.

Traders refrained from major moves as destabilizing global events played out -- violent protests across the Arab world that threaten oil shipments; a radiation leak at a Japanese nuclear plant that continues to contaminate food, air and water; and political chaos in debt-stressed Portugal.

Investors were also bracing for possible interest rates hikes by the U.S. central bank before the end of the year. Charles Plosser, president of the Federal Reserve's Philadelphia branch, said during a speech Friday that the stronger U.S. economy requires the central bank to begin planning ways in the "not-too-distant future" to raise short-term interest rates.

Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong, said higher borrowing costs could hurt small- and medium-sized U.S. businesses.

"If interest rates go up, they will be the hardest hit. You could see some form of retreat in equity markets. And if there is a retreat in the U.S., you will see a little bit of overflow into Asia," Kaan said.

On Wall Street Friday, stocks rose for the third straight day, capping the best week for the Dow Jones industrial average since July. The government said the economy grew at a 3.1% annual rate in the fourth quarter of 2010, slightly better than economists expected. the Dow industrial average rose 50.03 points, or 0.4%, to close at 12,220.59. The S&P 500 rose 4.14, or 0.3%, to 1,313.80. The Nasdaq rose 6.64 points, or 0.2%, to 2,743.06.

Benchmark crude for May delivery was down 55 cents at $104.85 in electronic trading on the New York Mercantile Exchange.

Expectations of higher interest rates in the U.S. helped boost the greenback. The dollar rose to 81.72 yen from 81.41 yen on Friday. The euro fell to $1.4063 from $1.4073.

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