FRANKFURT, Germany (AP) — Global stock markets declined Thursday on fears growth may slow in China and after U.S. Federal Reserve minutes indicated the central bank may not move as quickly as hoped to stimulate the country's economy.
Britain's FTSE 100 closed down just shy of 1 percent at 5,608.25. France's CAC-40 shed 0.7 percent to 3,135.18, while Germany's DAX fell 0.53 percent to 6,419.35. Asian markets fell overnight.
The euro sagged after the European Central Bank put into effect a zero interest rate on overnight deposits from banks.
In the U.S., the number of people seeking unemployment benefits dropped to a four-year low. However, that did little to alleviate concerns of a broader economic slowdown. The Dow industrials index was off 0.17 percent at 12,510.00 and the Standard & Poor's 500 fell 0.37 percent to 1,336.54.
Investors in Asia and Europe digested the release of minutes from the June 20 meeting of the Federal Reserve's open market committee, showing members might be open to more stimulus but only after more signs that the U.S. recovery is losing momentum.
Market-watchers concluded that meant no likely action at the Fed's next meeting July 31-Aug. 1. There had been speculation the Fed may engage in a third round of securities purchases aimed at increasing the supply of money in the economy, so-called quantitative easing.
"The release of the FOMC minutes last night disappointed the market in so far as it indicated that the majority of committee members were not yet on board with the notion that further QE should be employed," Rabobank analyst Jane Foley wrote in a note to investors.
Concerns about China, the growth motor for Asia and a key market for European companies, also weighed on stocks ahead of Friday's announcement of second-quarter growth figures.
Growth likely slowed to 7.9 percent, the worst reading in the aftermath of the 2008 global financial crisis, Singapore's DBS Bank said. China's economy grew 8.1 percent in the first quarter.
An unexpected quarter-point rate cut by the South Korean central bank added to concerns about growth, although the Bank of Japan left its benchmark lending rates unchanged after a two-day policy meeting on Thursday.
Asian shares fell generally. Japan's Nikkei 225 index fell 1.5 percent to 8,720.01, while Hong Kong's Hang Seng plunged 2 percent to 19,027.38.
Benchmark oil for August delivery was down 64 cents at $85.17 a barrel in electronic trading on the New York Mercantile Exchange.
The euro fell 0.4 percent to $1.2196 as ECB rate cuts reduced returns on euro-denominated investments. The central bank last week cut its rate on overnight bank deposits to zero from 0.25 percent, with effect from Wednesday. The zero rate is aimed at getting banks to stop parking so much money at the ECB's super-safe overnight deposit facility and lend it out to other banks. But it lowers money market rates on euro holdings.
The dollar dropped 0.4 percent to 79.313 yen.
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Associated Press Writer Alex Kennedy contributed from Singapore.