HONG KONG (AP) — World stock markets sank today over worries
about slower economic growth in China and a possible snag in
the deal for Greece to get its bailout money.
In early European trading, Germany’s DAX was down 0.4 percent
at 6,835 and the CAC-40 in France fell 0.4 percent to 3,473.81.
The FTSE 100 index of leading British shares lost 0.3 percent
U.S. stocks were poised to fall. Dow futures were down 0.3
percent at 12,915. Broader SP 500 futures were down 0.4
percent at 1,358.70.
Asian stock markets slid. Mainland Chinese shares saw their
biggest loss in almost a month a day after Premier Wen Jiabao
lowered the country’s economic growth target to 7.5 percent
from the 8 percent level it has stood at for years. The new
target underlines China’s emphasis on better, not faster,
The benchmark Shanghai Composite Index lost 1.4 percent to
2,410.45. The Shenzhen Composite Index for China’s second
smaller stock market lost 1 percent to 971.8.
Wen’s announcement is cause “for some concern that China might
not roll out so many pro-growth policies in the near future,”
said Jackson Wong, a vice president at Tanrich Securities.
Elsewhere in Asia, Japan’s Nikkei 225 index dropped 0.6 percent
to 9,637.63 and South Korea’s Kospi shed 0.8 percent to
Hong Kong’s Hang Seng lost 2.2 percent to 20,806.25 and
Australia’s SP/ASX 200 retreated 1.4 percent to 4,204.70.
Benchmarks in Taiwan, Singapore and India also fell.
Greece’s long-running debt crisis also weighed on the markets
because of worries not enough investors will swap their Greek
government bonds for new ones that are worth less and pay lower
Greece will learn by Thursday night what percentage of private
creditors will participate in the bond swap. Without the debt
relief, Greece won’t get a second, €130 billion ($172 billion)
international bailout and would face a default on its debts.
“Before the close of business Thursday, we really don’t know
whether it’s going to be a go,” said Wong. “So it just seems
not to be very wise to get into market at this point.”
Investors may also be hanging back because they’re waiting for
the release of some key economic data over the next few days,
Wong said. Those include a private report on U.S. payrolls on
Wednesday, Chinese inflation on Thursday and U.S. jobless data
In Hong Kong, AIA Group Ltd. tumbled 8.4 percent after New
York-based insurer American International Group said it was
selling off a substantial stake in the company to help repay
the U.S. government for its financial crisis bailout.
Shares of companies tied to China’s housing sector, such as
cement companies led declines in mainland markets. So did
nonferrous metal companies and coal miners.
“Investors are expecting that property policies will be
tightened again in the near future and that upcoming annual and
first quarter corporate earnings may be worse than earlier
expected,” said Li Jianfeng, an analyst at Caida Securities,
based in Shanghai. “It’s the beginning of a correction.”
Shares of Industrial Commercial Bank of China Ltd. fell
3.8 percent after the South China Morning Post newspaper,
citing unnamed sources, reported that Goldman Sachs was
planning to sell of a big chunk of the shares it owns in
China’s biggest state-owned commercial lender.
In currencies, the euro fell to $1.3182 from 1.3224 in late
trading Monday. The dollar fell to 81.27 yen from 81.46 yen.
Benchmark crude for April delivery dipped 4 cents to $106.68 a
barrel in electronic trading on the New York Mercantile
Exchange. The contract rose 2 cents to settle at $106.72 per
barrel on Monday.
Researcher Fu Ting in Shanghai contributed to this report.