Syria conflict worries weigh on markets

Renewed jitters over possible military strike on Syria weigh on financial markets

Associated Press

LONDON (AP) -- Renewed worries about a possible U.S. military strike against Syria sent global stock markets lower Wednesday.

Optimism brought about by strong economic indicators, particularly a manufacturing survey in the U.S., dissipated amid fears of a possible escalation in Syria's civil war following a chemical attack that killed scores of civilians. The U.S. government contends the regime of Syrian President Bashar Assad is responsible.

"Investors are set to stay cautious with one eye on the Syria development" ahead of this week's G-20 gathering of world leaders in Russia and U.S. employment data on Friday, said Gary Yau, an analyst at Credit Agricole CIB.

The so-called U.S. non-farm payroll figures, released this Friday, are a closely watched indicator of the country's economy and can set the tone for the markets for weeks to come.

Britain's FTSE 100 lost 0.5 percent to 6,434.37 while Germany's DAX declined 0.5 percent to 8,136.87 and France's CAC-40 dropped 0.7 percent to 3,946.69.

Wall Street was expected to slip on the open — Dow Jones industrial futures were 0.1 percent lower at 14,810, while S&P 500 futures were down the same rate at 1,637.75.

Japan's Nikkei 225 reversed early losses and rose 0.5 percent to close at 14,053.87, but benchmarks elsewhere in Asia fell. South Korea's Kospi declined almost 0.1 percent to 1,933.03. Australia's S&P/ASX 200 shed 0.7 percent to 5,161.60. Hong Kong's Hang Seng lost 0.3 percent to 22,326.22.

President Barack Obama has faced difficulty trying to amass support for U.S. military intervention in Syria, where an alleged chemical attack by government forces killed scores of civilians outside of Damascus. Britain's parliament voted against involvement, and Russia, a strong ally of Syria, has been sharply critical.

But Obama got a critical boost on Tuesday when a top U.S. lawmaker said he backed the U.S. president's call for a military strike. That intensified worries about the possible expansion of a conflict in an already volatile region of the world.

Still, the investment mood had been supported somewhat this week by an increase in corporate deal-making and growing confidence in the global economy. Verizon agreed Monday to buy out the remaining stake in its mobile phone business from Vodafone in a massive $130 billion deal and Microsoft announced Tuesday it would take over Nokia's smartphone business and a portfolio of patents and services.

However, Ryanair, Europe's biggest budget airline, saw its shares slump 12.6 percent after it warned it would likely miss its earnings targets this year. It said tickets sales for the autumn had fallen short of expectations.

Benchmark crude for October delivery was down 65 cents to $107.89 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.15 to close at $107.65 on Friday.

In currencies, the euro rose to $1.3175 from $1.3169 late Tuesday. The dollar fell to 99.54 yen from 99.62 yen.

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Sampson reported from Bangkok.

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