Stocks lower as China reform promise disappoints

Associated Press
A man looks at the electronic stock board of a securities firm in Tokyo, Wednesday, Nov. 13, 2013. Asian stock markets sank Wednesday after a highly anticipated meeting of Chinese leaders did not announce bold reforms to overhaul a growth model that is running out of steam. (AP Photo/Shizuo Kambayashi)
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LONDON (AP) — Global stock markets were under pressure Wednesday after a highly anticipated meeting of Chinese leaders failed to yield bold reforms to overhaul a growth model that is running out of steam.

Communist Party leaders in Beijing pledged to promote market forces in the country's state-dominated economy after the four-day meeting wrapped up late Tuesday. But in a disappointment for reform advocates, they failed to announce dramatic changes such as curbing the dominance of state industry, extending property rights to farmers or relaxing the one child birth control policy.

The ruling party said that market forces will play a "decisive role" in China's economy, an upgrade from "core role" assigned to the market in party policy over the past two decades, and flagged 2020 as a timeframe for changes.

"While the general approach is market-oriented, the absence of clear details is slightly disappointing," said Neil MacKinnon, global macro strategist at VTB Capital.

In Europe, Germany's DAX was down 0.7 percent at 9,016, while the CAC-40 in France fell 0.7 percent at 4,237.

The FTSE 100 index of leading British shares underperformed, trading 1.6 percent lower at 6,635 after new unemployment projections from the Bank of England raised speculation in the markets that interest rates may rise sooner than anticipated. In contrast, the British pound spiked, trading 0.5 percent higher at $1.5966.

In the U.S., the Dow Jones industrial average was down 0.4 percent at 15,691, while the broader S&P 500 index fell 0.2 percent to 1,763.

Earlier in Asia, China's Shanghai Composite plunged 1.8 percent to 2,087.94, and Hong Kong's Hang Seng sank 1.9 percent to 22,463.83. Tokyo's Nikkei shed 0.2 percent to 14,567.16, and South Korea's Kospi lost 1.6 percent to 1,963.56. Australia's S&P/ASX 200 fell 1.4 percent to 5,319.2.

Confirmation hearings for Janet Yellen as the new Federal Reserve chief on Thursday could provide a fresh cue for financial markets. Investors will look to her testimony for clues about when the Fed will begin reducing its massive monetary stimulus that has propped up the world's largest economy. Yellen has been tapped to replace Ben Bernanke as Fed chairman at the end of January.

In currency markets, trading was muted, with the euro down 0.3 percent at $1.3398 and the dollar 0.1 percent lower at 99.51 yen.

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Lee contributed from Seoul, South Korea.

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