World stocks slightly lower amid gloom

TOBY STERLING, AP Business Writer

AMSTERDAM -- World stock markets declined Tuesday against a backdrop of worries about global economic growth and Europe's debt crisis.

European Finance Ministers in Luxembourg said Spain doesn't need a bailout yet, even as yields on Spanish government-issued bonds rose. Meanwhile, comments by the International Monetary Fund on the global economy "provide a gloomy backdrop" for the day, said Monument Securities analyst Marc Ostwald.

The IMF cut its estimates for global economic growth in 2012 to 3.3 percent from 3.5 percent in July, and warned that mature economies are at risk of recession.

Britain's FTSE 100 fell more than 0.2 percent to 5,816.76. Germany's DAX lost 0.4 percent to 7,265.07 and France's CAC-40 was about flat at 3,407.36.

After a weak session Monday, Wall Street opened slightly lower again, with the Dow Jones Industrial index down 0.1 percent to 13,565.45, and the S&P 500 down 0.1 percent at 1,454.61. Aluminum maker Alcoa will be the first major company to report third quarter earnings later Tuesday.

In Asia, Chinese stocks bucked the negative trend and rose on news the country's central bank has injected an estimated 265 billion yuan ($42 billion) into the money supply in what analysts said was the second-biggest such move to date.

In addition, China's sovereign wealth fund said it is buying millions of shares in Industrial & Commercial Bank of China, the world's biggest bank by market capitalization.

Hong Kong's Hang Seng rose 0.5 percent to 20,937.28 while South Korea's Kospi fell 0.1 percent to 1,979.04. Australia's S&P/ASX 200 gained 0.5 percent to 4,505.30 on hopes of upcoming interest rate cuts. Japan's Nikkei 225 index tumbled 1.1 percent to 8,769.59, reopening after a holiday. Benchmarks in Singapore, Taiwan, Thailand and New Zealand also fell.

Mainland China's Shanghai Composite Index climbed 2 percent to 2,115.23, with financial and energy-related stocks gaining most.

Some analysts suggested that Asia still remains a bright spot in the global economy and that investors should keep the big picture in mind.

"Asia has grown nearly 32 (percent) in the four years since Lehman Brothers collapsed," analysts at DBS Bank Ltd. in Singapore said in a market commentary. "That's how big Asia is today and how fast it is growing. A weak Europe will never be a plus for Asia. But it's never mattered less either."

Benchmark oil for November delivery was up $1.14 cents to $90.47 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro was volatile, sliding on pessimistic remarks by ECB President Mario Draghi about economic prospects, then rising on remarks by German Chancellor Angela Merkel in Athens, repeating that Greece should remain part of the eurozone. By mid-afternoon it was down slightly at $1.2922 from $1.2928 late Monday in New York.

The dollar was slightly lower against the yen at 78.30 yen from 78.34 yen.