MANILA, Philippines (AP) -- World stock markets sank Wednesday as recent falls in Chinese copper and iron prices added to jitters that the world's No. 2 economy is continuing to slow.
In early European trading, France's CAC-40 dropped 1.1 percent to 4,303.09 and Germany's DAX was 1.1 percent lower at 9,202.53. Britain's FTSE 100 shed 0.9 percent to 6,623.50.
Futures augured a weak start to Wall Street's trading session. Dow futures and S&P 500 futures were both down 0.2 percent.
Market angst about China's economy has been fueled by weak exports for February, the government last week allowing the first-ever default in the domestic corporate bond market and the central bank permitting the tightly controlled yuan currency to weaken. China's economic growth of 7.7 percent last year was the lowest in two decades.
Recent days have seen a slide in copper and ore prices in Shanghai trading, which some analysts says has fueled worries of more corporate defaults because those commodities have frequently been imported for use as loan collateral rather than for industrial production.
"The concern now is with so much cargo under financing, and with prices falling, collateral value will raise the prospect of margin calls and therefore defaults," said Evan Lucas, market strategist at IG in Melbourne Australia.
After the solar company default in China's domestic bond market last week, trading in the shares and bonds of an electrical firm was suspended Tuesday after it reported losses for the second consecutive year.
Hong Kong's Hang Seng closed down 1.7 percent at 21,901.95 and China's Shanghai Composite dropped 0.2 percent to 1,997.69. South Korea's Kospi shed 1.6 percent to 1,932.54.
In Japan, the Nikkei 225 slid 2.6 percent to 14,830.39. Sentiment in Tokyo was additionally pessimistic after the Bank of Japan didn't expand already lavish monetary stimulus following a 2-day policy meeting that ended Tuesday.
Among other regional stock markets, Australia's S&P/ASX 200 dropped 0.6 percent to 5,384.20. Stock indexes were also down in Southeast Asia and New Zealand. Only India gained, with the Sensex up less than 0.1 percent.
"Markets remained nervous after more bad news came from China yesterday," Mizuho Bank Ltd. In Singapore said in a commentary. After recent disappointing trade and credit data "concerns on China's recovery have not waned, though we feel the fears are overdone," it said.
Benchmark U.S. crude for April delivery was down $1.02 to $99.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.09 to $100.03 a barrel Tuesday.
In currencies, the euro was nearly unchanged at $1.3852. The dollar fell to 102.74 yen from 102.94 late Tuesday.
- US International News
- Singapore International News