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Europe stocks down as global growth woes intensify

GREG KELLER, AP Business Writer
Monday, 8 Oct 2012 | 6:46 AM ET

PARIS -- Europe's stock markets fell Monday on concern about the global economy ahead of a two-day meeting of its finance ministers and a cut in the World Bank's growth forecasts for Asia.

Investors were also disappointed by falling commodity prices and a mixed finish on Wall Street on Friday despite a drop in the U.S. unemployment rate. There was also some frustration regarding mainland Chinese shares, which opened to losses after a weeklong holiday.

European closed lower Monday with Britain's FTSE 100 off 0.5 percent at 5,841.74, Germany's DAX down 1.4 percent to 7,291.21 and France's CAC 40 lower by the same amount at 3,406.53.

Wall Street also opened lower with Dow Jones industrial index down 0.19 percent to 13,510 and the S&P 500 futures lower by 0.41 percent at 1,454.97.

Investors continue to worry over protests in Spain and IMF concerns over Greece.

Tens of thousands of people marched in 56 Spanish cities Sunday to protest government budget cuts in a country experiencing its second recession in three years and record high unemployment.

The government has pushed through nine straight months of tough austerity measures that have prompted Spain's 17 regional governments to slash spending in health care and education.

Officials from the European Commission, International Monetary Fund and European Central Bank are currently in Greece assessing the country's progress in fulfilling the terms for receiving aid.

If their report doesn't clear the way for the payment of the next (EURO)31 billion ($40 billion) tranche of the country's bailout, Greece could be forced to default on its debts and perhaps leave the euro. Greece has warned that it will run out of money next month if it does not receive its next scheduled loan.

German Chancellor Angela Merkel is to visit Greece Tuesday for talks with Greek Prime Minister Antonis Samaras. Merkel is unpopular in Greece because her government has been instrumental in pushing Athens to make austerity cuts in exchange for its bailout loans.

The day's sullen trading began in Asia.

Hong Kong's Hang Seng fell 0.9 percent to 20,824.56. South Korea's Kospi lost 0.7 percent to 1,981.89 and Australia's S&P/ASX200 dropped 0.3 percent to 4,481.90.

Mainland China's Shanghai Composite Index shed 0.6 percent to 2,074.42 and the smaller Shenzhen Composite Index lost 0.5 percent to 849.30.

Benchmarks in Singapore, Taiwan and Thailand also fell. New Zealand's rose. Markets in Japan were closed for a public holiday.

The World Bank cut this year's growth outlook for developing Asia-Pacific economies to 7.2 percent from its May forecast of 7.6 percent. The bank cut its forecast for China, the region's biggest economy, to 7.7 percent from May's 8.2 percent. The bank cited weak global demand due to the lackluster U.S. recovery and Europe's recession.

Benchmark oil for November delivery slid 51 cents to $89.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed down $1.83 to $89.88 per barrel on the Nymex on Friday.

In currencies, the euro fell to $1.2972 from $1.3025 late Friday in New York. The yen rose to 78.19 yen from 78.69 yen.

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AP Business Writer Pamela Sampson in Bangkok, Thailand contributed to this report.