World stock markets slide on Europe, China woes
SEOUL, South Korea (AP) — World stock markets slid Monday as investors fretted about Europe's debt crisis and worries persisted over a slowdown in China.
A batch of downbeat news the past few days about Europe and China undermined investor sentiment that is already fragile from the downgrade of global economic growth forecasts, unleashing a sell-off in markets.
The financial pressure on Spain ratcheted up further Monday, with the interest rate on the country's key 10-year bond at levels that saw other European nations needing a financial bailout.
The euro sank to a near 12-year low against the yen and also lost ground against the dollar, reflecting continued doubts about the durability of the European common currency.
In early European trading, Britain's FTSE 100 shed 1.4 percent to 5,571.69 and France's CAC 40 lost 1.7 percent to 3,318.33. Germany's DAX was down 1.3 percent at 6,544.24. Futures augured losses on Wall Street with Dow and S&P 500 futures both down 0.9 percent.
On Friday, stocks in Italy and Spain plunged over 4 percent and 5 percent each after another Spanish region said it might seek financial aid from the government, adding to nagging concerns about Europe's debt crisis.
A forecast from a Chinese central bank adviser that China's economy could wane further in the third quarter also deepened concerns about the global slowdown. China's economic growth slowed to a three-year low of 7.6 percent in the second quarter.
Japan's Nikkei fell 1.9 percent to 8,508.32 and Hong Kong's Hang Seng dived 3 percent to 19,053.47. China's Shanghai Composite Index shed 1.3 percent to 2,141.40.
South Korea's Kospi dropped 1.8 percent to 1,789.44 and Taiwan's Taiex fell 1.9 percent to 7,028.73. Australia's S&P/ASX 200 was off 1.7 percent at 4,128.90.
Investors are awaiting quarterly financial results from industry bellwethers around the world — from tech giants Apple, Amazon and Facebook, to automakers and energy firms.
Analysts said major Asian auto and tech exporters are expected to report strong earnings later this week, but their upbeat reports will likely be overshadowed by weak economic conditions that will make it increasingly tough for these exporters to sustain sales growth.
"Even though Samsung and Hyundai are expected to report strong second-quarter earnings, their share prices are falling because of external economic conditions," said Shawn Oh, a Seoul-based analyst at Daishin Securities.
Benchmark crude for September delivery was down $2.61 to $89.23 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro was down 0.4 percent at $1.211 and against the Japanese currency it fell 1 percent to 94.46 yen, its lowest since late 2000. The dollar fell 0.5 percent to 78.07 yen.