World markets down as slowdown in Japan growth adds to evidence of cooling world recovery

World stock markets down amid Japan slowdown

BANGKOK — World stocks markets were mostly lower Monday amid a sharp slowdown in Japan’s growth that added to evidence the global economy is losing momentum.

Nearly all European benchmarks were lower while Asian markets put in a mixed performance after Wall Street on Friday extended losses to a fourth day. Oil prices hovered above $75 compared with $81 a week earlier as expectations for stronger fuel demand dimmed.

Japan hitting a soft patch comes after figures on the U.S. and Chinese economies also suggested global growth is facing headwinds as the initial burst of activity in the wake of the global recession cools.

The Japanese economy skidded to an annualized 0.4 percent expansion in the second quarter after revised 4.4 percent growth in the first three months of the year.

Consumer spending was flat, leaving exports to pick up the slack. But the contribution from exports was mostly concentrated in April — the first month of the quarter — while May and June had near zero growth on a month-to-month basis, Credit Suisse said in a report.

In early European trade, France’s CAC-40 dropped 1 percent while Britain’s FTSE 100 and Germany’s DAX were both off 0.5 percent. Futures augured losses on Wall Street with Dow futures falling 31 points, or 0.3 percent, to 10,236.00. Broader S&P futures lost 3.3, or 0.3 percent, to 1,072.80.

In Asia, Japan’s Nikkei 225 stock average ended down 56.97, or 0.6 percent, at 9,196.67, also hurt by sustained strength in the yen which can make the country’s exporters less profitable.

In a largely symbolic development, Japan’s GDP figures also showed that it had been overtaken as the world’s No. 2 economy by China in the second quarter.

South Korea’s Kospi declined 0.2 percent to 1,743.31 and Australia’s S&P/ASX 200 shed 0.5 percent to 4,438.50. Markets in Singapore, India, and Indonesia also fell.

Among the gainers was China’s Shanghai Composite Index, up 2.1 percent at 2,661.71 amid hopes credit tightening policies will be eased. Hong Kong’s Hang Seng added 0.2 percent to 21,112.12. Markets in Taiwan, Malaysia, Thailand and the Philippines gained.

U.S. stocks extended their losing streak to four days Friday after a mixed batch of readings on consumers further muddled investors’ sense of the economy.

One of the biggest obstacles to a strong recovery in the world’s biggest economy is weak consumer spending. Friday’s reports about consumers’ attitudes and spending didn’t point to a shopping rebound anytime soon.

The Dow fell 16.80, or 0.2 percent, to 10,303.15. The Standard & Poor’s 500 index fell 4.36, or 0.4 percent, to 1,079.25. The Nasdaq composite index fell 16.79, or 0.8 percent, to 2,173.48.

In currencies, the dollar fell to 85.81 yen from 86.18 yen. The euro rose to $1.2793 from $1.2755.

Benchmark crude for September delivery was up 20 cents at $75.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents on Friday to settle at $75.39 a barrel, its lowest level in a month.