U.S. Markets closed

World stocks lower amid US, China economy concerns

Alex Kennedy, Associated Press

SINGAPORE (AP) -- World stocks were mostly lower Tuesday as a four-day slump in U.S. markets sparked by concern about the strength of the world's biggest economy weighed on investor confidence.

In early trading in Europe, France's CAC 40 slid 1.5 percent to 3,271.06, London's FTSE 100 dropped 1.0 percent to 5,665.87, and Germany's DAX ceded 1.1 percent to 6,701.75.

Tokyo's Nikkei 225 index slipped 0.1 percent to 9,538.02 and Hong Kong's Hang Seng fell 1.1 percent to 20,362.22. China's benchmark Shanghai Composite Index rose 0.9 percent to 2,305.86. South Korea's Kospi shed 0.1 percent to 1,994.41.

Weaker than expected hiring in March has fueled doubt that U.S. economic growth is strong enough to justify the rally in global stocks during the last few months. The S&P 500 index jumped almost 30 percent from October to a four-year high a week ago.

Markets will be closely watching first quarter gross domestic product results, starting with China on Friday. China lowered its GDP growth target last month to 7.5 percent, sparking concern the world's second-largest economy is slowing faster than expected.

"If Chinese growth this year can come in not at 7.5 percent, but rather closer to 8.3 or 8.5 percent, then we should see a bounce in the market," said Lorraine Tan, director of equities research with Standard & Poor's in Singapore. "What will take the market to the next level are signs of a pickup again in growth out of Asia and other emerging markets."

Some analysts expect a possible recession in Europe and slowing growth in China and the U.S. will drag on markets this year. Efforts to lower high debt levels by consumers and governments also make global stocks unattractive, said David Darst, chief investment strategist with Morgan Stanley.

Other argue concerns about high oil prices, Europe's sovereign debt crisis and slowing Chinese economic growth are overblown.

"The most likely scenario is that stock prices grind higher over the rest of the year," said Garry Evens, equities strategist with HSBC in Hong Kong. "It's wrong to get too pessimistic about the outlook for the Chinese economy this year."

Elsewhere in Asia, the benchmark indexes in Australia, Thailand and India were down. Those of Taiwan, New Zealand, and Singapore were up.

In Japan, electronics giant Sony Corp. more than doubled its projected net loss for the fiscal year through March to 520 billion yen ($6.4 billion), its worst loss ever, due to a massive tax charge. Shares fell 3.5 percent before the announcement.

On Monday, the Dow Jones industrial average finished down 130.55 points at 12,929.59, its first close below 13,000 since March 12. The S&P ended the day off 15.88 points at 1,382.20. The Nasdaq composite closed down 33.42 at 3,047.08.

In currency markets, the dollar slipped to 81.15 yen while the euro was little changed at $1.3084.

Benchmark oil for May delivery was off 34 cents to $102.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 85 cents to settle at $102.46 in New York on Monday.