World stock markets drop after Wall Street resumes slide ahead of rate decisions, jobs figures

World stocks drop ahead of rate decisions, jobs

HONG KONG — World stocks retreated Thursday as a slide on Wall Street dented confidence ahead of central bank decisions in Europe and a key U.S. jobs report.

Selling hit almost every major market in Asia and Europe, following losses in the U.S. the previous session that halted a couple days of gains in global markets after a dismal January. Oil prices were lower, while the dollar was little changed against the yen and higher versus the euro.

Sentiment took a hit after Wall Street, coming off a big two-day advance, closed lower as investors returned to worrying about the pace of recovery following a disappointing report about the U.S. services sector.

The Institute for Supply Management said its index of service activity rose to 50.5 in January from a revised 49.8 in December, missing expectations. The news overshadowed reports the private sector shed fewer jobs than expected and gave investors another reason to hold back before monthly jobs data due out Friday.

Investors were also awaiting interest rate decisions and economic assessments from the European Central Bank and Bank of England. Both were expected to keep rates unchanged.

Of bigger importance will be the ECB’s comments about Greece’s unfolding debt crisis, among the uncertainties that have yanked markets lower in recent weeks, and any changes to Britain’s policies aimed at mending its economy.

The combination of mixed economic data, worsening public finances and confusion over financial reforms has reversed last year’s bull run for now, with a number of markets down between 5 percent and 10 percent for the year.

“It definitely dampens confidence at the moment,” said Lorraine Tan, director of equities research at Standard & Poor’s in Singapore. “What we are seeing is a correction in an overall bull market. For us this was overdue after the rally in the second half of last year.”

As trading got started in Europe, Germany’s DAX was off 0.6 percent, France’s CAC-40 lost 0.5 percent and Britain’s FTSE 100 was down 0.9 percent. Wall Street futures pointed to a lower open in the U.S. Thursday. S&P futures shed 6.5 points, or 0.6 percent, to 1,089.90.

In Japan, the Nikkei 225 stock average lost 48.35, or 0.5 percent, to 10,355.98 with Toyota continuing to drag on the market as the world’s largest automaker grappled with a global recall.

It closed down 3.5 percent before announcing after the bell it returned to profit last quarter and had raised its annual earnings forecast. The results, however, didn’t reflect damage from the massive recalls linked to faulty gas pedals

Elsewhere, Hong Kong’s Hang Seng tumbled 1.8 percent to 20,341.64 and Shanghai’s main index fell 0.3 percent. Markets in India and Australia also lost ground. Down most of the day, South Korea’s market recovered to add 0.1 percent.

This week’s highlight will be America’s national monthly jobs report, which is to be released Friday and could help set the mood for markets in the coming days and weeks.

On Wall Street Wednesday, the Dow fell 26.30, or 0.3 percent, to 10,270.55. The S&P 500 index fell 6.04, or 0.6 percent, to 1,097.28, while the Nasdaq rose 0.85, or less than 0.1 percent, to 2,190.91.

Oil prices were lower in Asia, with benchmark crude for March delivery off 83 cents at $76.15. The contract lost 25 cents overnight.

In currencies, the dollar was lower at 90.76 yen from 90.97 yen. The euro slipped to $1.3826 from $1.3888.