World stock markets fall as Greece remains unresolved, Indian economy shows weakness

By Pamela Sampson

THE ASSOCIATED PRESS

BANGKOK, Thailand — World stock markets fell Tuesday, after Europe’s finance ministers postponed approval of an urgently needed aid payment for debt-mired Greece.

The ministers, meeting Monday in Brussels, delayed approval of the next C31.5 billion ($40 billion) installment of Greece’s bailout loan. They did give Greece two additional years — until 2016 — to make fundamental changes to its economy that are a condition of its emergency bailout package.

European stocks fell in early trading. Britain’s FTSE 100 fell 0.8 per cent to 5,721.86. Germany’s DAX lost 0.8 per cent to 7,112.62. France’s CAC-40 shed 1 per cent at 3,379.64. Wall Street also appeared headed for a session of losses with Dow Jones industrial futures shedding 0.6 per cent to 12,701 and S&P 500 futures down 0.7 per cent to 1,368.20.

International lenders have twice agreed to bail out Greece to keep the country from defaulting on its massive debts and a messy exit from the euro currency union. They have pledged a total of C240 billion in rescue loans, and the country has received about C150 billion of those loans so far.

Analysts at Credit Agricole CIB in Hong Kong said in a market commentary that the failure to deliver Greece’s next installment “came as no surprise.”

“The Asian region is weaker as Greece concerns continue to cap markets and dent confidence. After having been in a holding pattern, markets have finally given up their grip on some key support levels,” said Stan Shamu of IG Markets in Melbourne.

Stocks fell in Asia. Japan’s Nikkei 225 index fell 0.2 per cent to close at 8,661.05. Hong Kong’s Hang Seng lost 1.1 per cent at 21,188.65. South Korea’s Kospi dropped 0.6 per cent to 1,889.70. Australia’s S&P/ASX 200 tumbled 1.5 per cent to 4,379.80.

Mainland Chinese stocks fell after Housing Minister Jiang Weixin said Monday during the Communist Party congress that curbs placed on the property industry will not be relaxed in the near future.

The Shanghai Composite Index lost 1.5 per cent to 2,047.89, while the Shenzhen Composite Index dropped 2 per cent to 816.15. Shares in real estate weakened. Poly Real Estate, China’s second-largest listed real estate developer, lost 1.4 per cent while industry leader China Vanke lost 2.2 per cent.

Markets continued their slump from Monday, when government data released in New Delhi showed India’s industrial production contracting 0.4 per cent in September, far worse than expected. Manufacturing output continued to slump amid signs of weakness in investment and consumer demand.

The results indicate that Asia’s third-largest economy still has a way to go to pull itself out of its current slowdown.

U.S. stocks closed nearly unchanged Monday, after a day of uneven trading plagued by investors’ fears about the approaching “fiscal cliff.”

The fiscal cliff refers to government spending cuts and tax increases that are scheduled to kick in at the beginning of the new year, unless a divided Congress and the White House can work out a compromise before then.

Benchmark oil for December delivery fell 87 cents to $84.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 50 cents to finish at $85.57 per barrel.

In currencies, the euro fell to $1.2670 from $1.2714 late Monday in New York. The dollar from fell to 79.22 yen from 79.46 yen.

———

AP researcher Fu Ting contributed from Shanghai.

04:54ET 13-11-12