Stock markets glum as confidence in recovery fades

A pedestrian passes before a share prices board in Tokyo on Oct. 14, 2014.

YOSHIKAZU TSUNO/AFP/Getty Images

TOKYO - Stocks were trading lower worldwide on Tuesday, following a dismal performance on Wall Street the day before, as confidence in the global economic recovery faded.

European markets fell. France's CAC 40 slipped 0.7 percent to 4,049.95 and Britain's FTSE 100 dropped 0.5 percent to 6,335.04. Germany's DAX lost 0.6 percent to 8,763.25. But Wall Street looked headed for a rebound after Monday's rout. Dow Jones futures were up 0.2 percent and S&P 500 futures added 0.3 percent.

Resistance from Germany to increasing government spending to help European growth dampened hopes for additional stimulus to counter what some economists believe may be a lapse back into recession for the region. On Tuesday, Germany got another dose of bad economic news -- the ZEW index of investor sentiment fell for a tenth consecutive month in October.

Concern over the global outlook and the recent relative strength of the Japanese yen, which could dent the competitiveness of exporters, cast a pall over Tuesday's session in Tokyo. Shares of major exporters fell, with Toyota Motor Corp. sinking 3.9 percent and Panasonic dropping 3.1 percent.

"Growth concerns continue to rattle global investors. Signs that Europe is heading toward recession, and fears that the Japanese authorities' stimulus program is not getting traction, have many forecasters pulling down their estimates for 2014/15 growth," Michael McCarthy at CMC Markets wrote in a commentary.

Shares were mixed after a strong start. Japan's Nikkei 225 fell 2.4 percent to 14,936.51 after Tokyo was closed for a holiday Monday. Hong Kong's Hang Seng fell back after a morning rally, closing down 0.4 percent at 23,047.97. South Korea's Kospi gained 0.1 percent to 1,929.25 and Australia's S&P/ASX 200 added 1.0 percent to 5,207.40. Markets in Southeast Asia were mixed, while China's Shanghai Composite Index lost 0.3 percent to 2,359.47.

The U.S. dollar was trading at 106.92 yen, slipping from 107.00 late Monday. The euro edged up to $1.2649 from $1.2740.

Benchmark U.S. crude was down 84 cents to $84.90 a barrel in electronic trading on the New York Mercantile Exchange. It fell 8 cents to close at $85.74 a barrel on Monday.