World shares fall after weak U.S. GDP report

TOKYO - World stock markets were mostly lower Thursday after the U.S. economy skidded to a near halt in the first three months of the year and Japan's central bank held off from expanding its monetary stimulus.

Britain's FTSE 100 rose 0.1 percent to 6,954.02 while France's CAC 40 slipped 0.1 percent to 5,033.48. Germany's DAX edged up 0.1 percent to 11,442.19. Tokyo's benchmark dived nearly 3 percent. Wall Street appeared set for a weak start, with Dow and S&P futures both down 0.2 percent.

A severe winter, weak exports and cutbacks in oil and gas drilling sapped economic growth to a feeble 0.2 percent in January-March, the poorest performance in a year, the Commerce Department reported. Markets registered their disappointment, with the Standard & Poor's 500 down 7.91 points, or 0.4 percent, to 2,106.85 on Wednesday. The Dow Jones industrial average dropped 74.61 points, or 0.4 percent, or 18,035.53 points.

"Equities are unwinding across the globe as growth fears resurface following an alarming" report on the U.S. economy, Stan Shamu, market strategist at IG, said in a commentary. "Some analysts have gone as far as saying the U.S. recovery has ground to a halt."

Japan reported that its industrial output slipped 0.3 percent in March from a month earlier and 1.2 percent from the year before, on weak demand for electrical machinery, fuel products and metals. The data were not as bad as expected however and the central bank kept its ultra-loose monetary policy intact despite expectations for stimulus. Bank of Japan Gov. Haruhiko Kuroda remains upbeat about the prospects for a "moderate recovery," despite halting progress toward his 2 percent inflation goal and weakening industrial production and household spending.

Japan's Nikkei 225 slid 2.7 percent to 19,520.01 and Hong Kong's Hang Seng slipped 0.9 percent to 28,133.00. South Korea's Kospi dropped 0.7 percent to 2,127.17 and Australia's S&P/ASX 200 lost 0.8 percent to 5,790.00. Markets in Taiwan, mainland China and Southeast Asia also fell.

The euro rose to $1.119 from $1.1117 on Wednesday, the currency's highest level against the dollar in almost two months. The dollar slipped to 118.92 yen from 119.01 yen.

U.S. benchmark crude oil was up 55 cents at $59.12 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.52 to $58.58 a barrel on Wednesday. Brent crude, the international benchmark for oil, gained 28 cents to $66.12. On Wednesday, it gained $1.20 to $65.84.