World stocks hit by signs of slowdown in China, US
World stocks down after US cuts 3Q growth estimate, survey shows China manufacturing slowdown
BANGKOK (AP) -- World stocks fell Wednesday after a survey showed China's
factories are cutting production and the U.S. lowered its third quarter growth
estimate, adding to pessimism from Europe's simmering debt crisis.
Benchmark oil fell below $97 a barrel while the dollar strengthened against the euro and held steady against the yen.
European shares sank in early trading. Britain's FTSE 100 fell 0.3 percent to 5,191.94 and Germany's DAX lost 0.4 percent to 5513.08. France's CAC-40 was down 1 percent to 2,844.49.
Futures augured a lower open on Wall Street. Dow Jones industrial futures lost 0.7 percent to 11,362 while S&P 500 futures slipped 0.8 percent to 1,173.10.
Asian stock markets posted broad losses earlier in the day, hit by the signs of weakness in the world's two biggest economies. The U.S., a major market for Asia's exporters, grew at a 2 percent annual rate from July through September, down from an initial estimate of 2.5 percent. China, meanwhile, suffered a fall in manufacturing activity in November, according to a preliminary survey.
Hong Kong's Hang Seng slid 2.1 percent to 17,864.43. South Korea's Kospi lost 2.4 percent to 1,783.10 and Australia's S&P/ASX 200 shed 2 percent to 4,051. Mainland China's Shanghai Composite Index fell 0.7 percent to 2,395.07, posting its sixth straight session of losses. Japanese stock markets were closed for a public holiday.
Jackson Wong, vice president of Tanrich Securities in Hong Kong, said already weak market sentiment was further dampened by HSBC's China manufacturing index showing a contraction in activity.
The manufacturing gauge fell to 48 in November from 51 in October — its sharpest fall since March 2009. A reading below 50 indicates contraction from the previous month, but the index often undergoes significant revision from its preliminary level.
"The market is still waiting for some kind of price catalyst to bound back. Otherwise, we still trend down bit by bit until something happens," Wong said.
Higher borrowing costs for Spain, meanwhile, renewed worries about Europe's debt crisis. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new government coming to power this week.
Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels.
Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent. The rate on Spain's own benchmark 10-year bond is dangerously close to that level, 6.58 percent.
Underscoring jitters was the lack of market reaction to an announcement by the International Monetary Fund that it will provide quick cash on flexible terms to countries facing sudden financial stress.
"Failure of this news to result in significant gains across markets shows just how cautious investors are," Stan Shamu of IG Markets in Melbourne said in a report.
Concerns remain that Europe's debt crisis is pushing the region toward recession, which would slow industrial activity in countries around the world that export to Europe.
Australian resource shares took a big hit after the country's House of Representatives approved a law imposing a windfall profits tax on big mining companies. The Senate is expected to endorse the measure in early 2012.
BHP Billiton, the world's largest mining company, fell 3.1 percent. Rival Rio Tinto lost 3.4 percent and Energy Resources of Australia plummeted 5.9 percent.
In Seoul, auto parts maker Mando rose 2.6 percent on hopes that a free trade pact between South Korea and Washington would boost its earnings, Yonhap News Agency reported.
On Tuesday, the Dow Jones industrial average lost 0.5 percent to close at 11,493.72. The Standard & Poor's 500 fell 0.4 percent to 1,188.04. The Nasdaq composite fell 0.1 percent to 2,521.28.
Benchmark oil for January delivery was down $1.04 to $96.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to finish at $98.01 per barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3457 from $1.3509 late Tuesday in New York. The dollar was little changed at 76.98 yen.
Benchmark oil fell below $97 a barrel while the dollar strengthened against the euro and held steady against the yen.
European shares sank in early trading. Britain's FTSE 100 fell 0.3 percent to 5,191.94 and Germany's DAX lost 0.4 percent to 5513.08. France's CAC-40 was down 1 percent to 2,844.49.
Futures augured a lower open on Wall Street. Dow Jones industrial futures lost 0.7 percent to 11,362 while S&P 500 futures slipped 0.8 percent to 1,173.10.
Asian stock markets posted broad losses earlier in the day, hit by the signs of weakness in the world's two biggest economies. The U.S., a major market for Asia's exporters, grew at a 2 percent annual rate from July through September, down from an initial estimate of 2.5 percent. China, meanwhile, suffered a fall in manufacturing activity in November, according to a preliminary survey.
Hong Kong's Hang Seng slid 2.1 percent to 17,864.43. South Korea's Kospi lost 2.4 percent to 1,783.10 and Australia's S&P/ASX 200 shed 2 percent to 4,051. Mainland China's Shanghai Composite Index fell 0.7 percent to 2,395.07, posting its sixth straight session of losses. Japanese stock markets were closed for a public holiday.
Jackson Wong, vice president of Tanrich Securities in Hong Kong, said already weak market sentiment was further dampened by HSBC's China manufacturing index showing a contraction in activity.
The manufacturing gauge fell to 48 in November from 51 in October — its sharpest fall since March 2009. A reading below 50 indicates contraction from the previous month, but the index often undergoes significant revision from its preliminary level.
"The market is still waiting for some kind of price catalyst to bound back. Otherwise, we still trend down bit by bit until something happens," Wong said.
Higher borrowing costs for Spain, meanwhile, renewed worries about Europe's debt crisis. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new government coming to power this week.
Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels.
Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent. The rate on Spain's own benchmark 10-year bond is dangerously close to that level, 6.58 percent.
Underscoring jitters was the lack of market reaction to an announcement by the International Monetary Fund that it will provide quick cash on flexible terms to countries facing sudden financial stress.
"Failure of this news to result in significant gains across markets shows just how cautious investors are," Stan Shamu of IG Markets in Melbourne said in a report.
Concerns remain that Europe's debt crisis is pushing the region toward recession, which would slow industrial activity in countries around the world that export to Europe.
Australian resource shares took a big hit after the country's House of Representatives approved a law imposing a windfall profits tax on big mining companies. The Senate is expected to endorse the measure in early 2012.
BHP Billiton, the world's largest mining company, fell 3.1 percent. Rival Rio Tinto lost 3.4 percent and Energy Resources of Australia plummeted 5.9 percent.
In Seoul, auto parts maker Mando rose 2.6 percent on hopes that a free trade pact between South Korea and Washington would boost its earnings, Yonhap News Agency reported.
On Tuesday, the Dow Jones industrial average lost 0.5 percent to close at 11,493.72. The Standard & Poor's 500 fell 0.4 percent to 1,188.04. The Nasdaq composite fell 0.1 percent to 2,521.28.
Benchmark oil for January delivery was down $1.04 to $96.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to finish at $98.01 per barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3457 from $1.3509 late Tuesday in New York. The dollar was little changed at 76.98 yen.
