World stocks dip as China trade data disappoints

Market Analyze

(AP) HONG KONG - World stock markets were mostly lower Thursday, as disappointing Chinese trade data added to investor gloom over the Europe's brewing sovereign debt crisis.

In early European trading, France's CAC 40 was down 0.5 percent while the FTSE 100 index of leading British companies retreated 0.3 percent to 5,516.25. Germany's DAX rose 0.2 percent to 6,485.11.

U.S. stock futures were poised for a weak open. Dow futures were down 0.1 percent to 12,777.00 while broader S&P 500 futures rose less than 0.1 percent to 1,351.80.

Asian markets fell after the release of Chinese data showing slower than expected exports and imports in April.

The weak import growth raised fears the world's second-biggest economy wasn't doing enough to stimulate domestic demand amid an economic slowdown. The weaker than expected figures for both imports and exports also reinforced concerns over lax global demand for China's exports and slack Chinese demand for commodities needed from other countries to fuel growth.

Japan's Nikkei 225 index dropped 0.4 percent to close at 9,009.65 and South Korea's Kospi lost 0.3 percent to end at 1,944.93. Hong Kong's Hang Seng fell 0.5 percent to 20,227.28.

But mainland Chinese stocks took a smaller hit, with the poor trade numbers also raising hopes that China's leaders would take steps to ease policy measures to boost demand.

The benchmark Shanghai Composite Index was almost unchanged, gaining less than 0.1 percent to 2,410.23 while the Shenzhen Composite Index of China's smaller, second market rose 0.4 percent to 966.66. Shares traded in a narrow range ahead of Chinese inflation data out Friday.

Australia's S&P/ASX 200 was nearly up 0.5 percent to 4,295.60. Benchmarks in Singapore, Thailand, India and Indonesia were lower. Key Benchmarks in Taiwan and New Zealand rose.

World markets have been roiled this week by political instability in Europe. Greece has been left without a government since elections on Sunday, adding to growing worries that it will drop out of the euro currency union or be forced out.

The turmoil shook markets in Spain, where the interest rate that the government must pay on benchmark 10-year bonds rose to an uncomfortably high level of 6.06 percent. Rates of above 7 percent are seen as unsustainable, and forced Greece, Ireland and Portugal to ask for bailouts.

"The European turmoil has kept investors jittery here in Hong Kong, but after dropping five days in a row, the market is oversold," said Louis Wong, a director at Phillip Securities. "So we saw a rebound this morning, but the rebound is quite weak, because now the worry seems to have moved to Spain."

Investors will be looking ahead to more economic data expected this week, including a decision by the Bank of England on whether to expand fiscal stimulus and U.S. jobless claims and trade balance data out Thursday.

"It is going to be a big day for event risk," said Stan Shamu, market strategist with IG Markets in Melbourne, Australia.

Hong Kong's Cathay Pacific Airways slid 6.4 percent after the airline said that first half earnings would be disappointing because of a cloudy global economic outlook and high fuel prices that are forcing it to cut costs and reduce flights on some long-haul routes.

Singapore Airlines Ltd. fell 2.5 percent after the carrier posted its first loss since 2009 in the first quarter as higher fuel prices sent costs up.

Benchmark oil for June delivery was down 42 cents at $96.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $96.81 per barrel in New York on Wednesday.

In currencies, the euro rose to $1.2955 from $1.2945 late Wednesday in New York. The dollar rose to 79.73 Japanese yen from 79.68 Japanese yen.