World stocks sink on global growth worries

Associated Press
A man looks at an electronic stock indicator in Tokyo, Tuesday, April 16, 2013.  Asian stock markets were mostly lower Tuesday as weak economic data, falling commodity prices and big losses on Wall Street shook investors. A deadly bombing in the U.S. also rattled confidence.(AP Photo/Shizuo Kambayashi)
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BANGKOK (AP) — World stock markets were mostly lower Tuesday as weak economic data, falling commodity prices and big losses on Wall Street shook investors. A deadly bombing in the U.S. also rattled confidence.

The sell-off in markets was triggered by the Chinese government's report Monday that growth in the world's second-largest economy slowed to 7.7 percent in the first quarter from 7.9 percent in the final quarter of last year. Growth was expected to accelerate slightly to 8 percent.

The report stoked worries about the strength of China's economy at a time when U.S. economic data has disappointed and Europe remains embroiled in its government debt crisis. It also pummeled oil and commodity prices.

A bombing at the finish line of the Boston Marathon that appeared timed for maximum casualties further fanned anxiety. Three people were killed and more than 140 injured. No one has claimed responsibility.

"China GDP data spooked investors into thinking that the world's second largest economy is slowing at a faster rate than anticipated," said Evan Lucas of IG Markets in Melbourne. "All these gyrations on commodity and currency markets were compounded further by the dreadful events in Boston."

Lucas said the markets were probably overreacting to the China growth news, but it creates a disquieting picture when coupled with last week's trade data showing some weakness in the country's exports.

European stocks fell in early trading. Britain's FTSE fell 0.7 percent to 6,302.38. Germany's DAX lost 0.8 per cent to 7,652.29. France's CAC-40 fell 0.7 percent to 3,683.78. But U.S. markets appeared ready for a comeback, with Dow Jones industrial futures rising 0.4 percent to 14,563. S&P 500 futures rose 0.4 percent to 1,548.90.

In Asia, Japan's Nikkei fell 0.4 percent to close at 13,221.44. Hong Kong's Hang Seng lost 0.5 percent to 21,672.03. South Korea's Kospi opened lower but ended 0.1 percent higher at 1,922.21. Australia's S&P/ASX 200 shed 0.3 percent to 4,950.80. Benchmarks in mainland China and India rose, while New Zealand and the Philippines fell.

On top of the disappointing data from China were figures on Monday showing a drop in U.S. homebuilder confidence. A separate report showed weak manufacturing in the Northeast. On Friday, the Commerce Department said retail sales fell 0.4 percent in March from the previous month, reinforcing views that the U.S. recovery is losing some steam. The negative news pummeled Wall Street on Monday, its worst day of the year.

Gold-linked shares across the region fell following steep drops in the precious metal's price. Hong Kong-listed Zijin Mining Group, China's biggest gold miner, fell 1.7 percent. In Australia, Kingsgate Consolidated tumbled 5.4 percent and Newcrest Mining fell 5.1 percent.

Korean Air Lines Co., South Korea's flagship carrier, sank 7 percent. Enthusiasm for airline shares has been damped by threatening rhetoric from North Korea in recent days.

The sharp decline in gold and fears about global growth reverberated throughout commodity markets. Benchmark oil for May delivery fell $1.01 to $87.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.58, or 2.8 percent, to finish at $88.71 a barrel on Monday.

In currencies, the euro rose slightly to $1.3047 from $1.3036 late Monday in New York. The dollar rose to 97.64 yen from 97.18 yen.

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