World stocks fall amid US budget impasse

BANGKOK (AP) -- Uncertainty about the outcome of a budget battle in Washington pushed world stock markets lower on Monday. Chinese shares dived amid moves to cool high housing prices.

President Barack Obama and his political opponents have failed so far to agree on a way to roll back automatic spending cuts that took effect Friday. Those cuts slash $85 billion from the nation's budget, which could slow down the economy.

U.S. lawmakers say they want to undo the cuts so that federal programs can be spared but are divided over whether higher taxes should be used to pay for them.

Evan Lucas of IG Markets in Melbourne said he believes the budget fight is just "another political distraction that will cause some investors to cash out and buy back in on the dips."

European stock markets opened lower. Britain's FTSE 100 declined 0.6 percent to 6,340.81. Germany's DAX fell 0.8 percent to 7,644.87 and France's CAC-40 lost 0.5 percent to 3,679.87. Wall Street appeared headed for a lower open too, with Dow Jones industrial futures slipping 0.3 percent to 14,029. S&P 500 futures shed 0.4 percent to 1,510.80.

Stock markets in China were dragged down by property shares that tumbled after China's Cabinet ordered new measures to cool surging housing prices. The government said it will raise required minimum down payments in areas where prices are deemed to be rising too fast and crack down on efforts to evade limits on how many properties each buyer can acquire. The Shanghai Composite Index slid 3.7 percent to 2,273.40.

"The policy was already given out two weeks ago but last Friday, more details came out," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. That sent real estate shares lower. Hong Kong-listed Poly Real Estate plunged 10 percent. China Resources Land nosedived 8.9 percent. China Vanke Co., listed in Shenzen, toppled 10 percent.

Hong Kong's Hang Seng fell 1.5 percent to 22,537.81. South Korea's Kospi lost 0.7 percent to 2,013.15. Australia's S&P/ASX 200 dropped 1.5 percent to 5,010.50. Benchmarks in Singapore, Taiwan, Indonesia and the Philippines also fell.

But Japan's Nikkei 225 bucked the negative trend, rising 0.4 percent to close at 11,652.29. Investors are seemingly in a buoyant mood ahead of a leadership change at the Bank of Japan. Gov. Masaaki Shirakawa will step down March 19, making way for a new chief who supports Prime Minister Shinzo Abe's call for bolder monetary easing. The central bank meets Wednesday and Thursday for a regular monetary policy review.

Benchmark oil for April delivery was down 35 cents to $90.33 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.37 to close at $90.68 a barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3008 from $1.3017 late Friday in New York. The dollar fell to 93.56 yen from 93.58 yen.