World stocks choppy as global economy wanes

World stock markets choppy amid signs that global economy faces sluggish recovery

Associated Press

BANGKOK (AP) -- Global stock markets were choppy Thursday as evidence of weakness in the global economy kept many investors at bay.

Markets were also cautious after disappointing U.S. corporate earnings on Wednesday, although there was some positive news in the U.S. Federal Reserve's so-called Beige Book. The survey, released late Wednesday, showed modest growth across the U.S.

Britain's FTSE 100 rose 0.2 percent to 6,255.91. Germany's DAX added 0.3 percent to 7,552.25. France's CAC-40 rose 0.6 percent to 3,620.86.

Wall Street looked set for a rebound. Dow Jones industrial futures rose 0.2 percent to 14,579 and S&P 500 futures advanced 0.2 percent to 1,549.20.

Asian stock markets dropped, however, with investors in Hong Kong still feeling cautious due to a bird flu outbreak in eastern China and the rapid rise of Chinese government debt.

"Funds are still staying with those stock markets that are under monetary easing mode," said Kwong Man Bun, the chief operating officer at KGI Securities in Hong Kong. "Investors remain on sidelines to wait for signals that recent corrections have come to an end. So far this signal is not clear."

Hong Kong's Hang Seng shed 0.3 percent to 21,512.52. Japan's Nikkei 225 index tumbled 1.2 percent to close at 13,220.07.

South Korea's Kospi dropped 1.2 percent to 1,900.06. Australia's S&P/ASX 200 slid 1.6 percent to 4,924.40. Benchmarks in Taiwan and New Zealand also fell. Mainland China, Thailand and the Philippines rose.

European economic indicators this week also raised concerns: Germany reported a drop in investor confidence while car sales have plummeted across the region. Labor market figures for the U.K. were also negative, suggesting the British economy is unlikely to stage a significant recovery in coming months.

The International Monetary Fund on Tuesday lowered its outlook for the world economy, predicting that government spending cuts will slow U.S. growth and keep the euro currency countries in recession this year.

The week got off to a bad start Monday, when China said its economic growth slowed in the first three months of the year to 7.7 percent, below the 8 percent level anticipated by markets. That caused U.S. stocks, energy and other commodities to plunge. Gold fell the most in 30 years.

On Wednesday, stock markets in the U.S. again turned sour on disappointing earnings from Bank of America. The bank has been mired in mortgage-related lawsuits related to its acquisition of Countrywide, which played a major role in the U.S. financial crisis by issuing subprime loans. Traders also began to worry about Apple Inc.'s sales after a supplier hinted at a slowdown in iPhone and iPad production.

Benchmark oil for May delivery was up 35 cents to $87.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.04, or 2.3 percent, to close at $86.68 in New York on Wednesday.

In currencies, the euro rose to $1.3047 from $1.3014 late Wednesday in New York. The dollar rose to 98.18 yen from 97.84 yen.

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