Global stocks pulled down by weaker Chinese economy

BEIJING - Global stocks sagged Wednesday after the IMF's lower growth forecast added to anxiety over a weaker Chinese economy.

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KEEPING SCORE: In early trading, Germany's DAX tumbled 2.4 per cent to 9,436.57 and France's CAC-40 shed 2.2 per cent to 4,176.45. Britain's FTSE 100 sank 2 per cent to 5,762.07. Wall Street looked set for losses. Futures for the Dow Jones industrial average were down 1.9 per cent at 15,617.00 and S&P 500 futures lost 1.8 per cent to 1,838.60.

IMF OUTLOOK: The International Monetary Fund cut its forecast for this year's global economic growth to 3.4 per cent from its October outlook of 3.6 per cent. The IMF downgraded the outlook for developing economies to 4.3 per cent growth from a forecast of 4.5 per cent in October. Earlier this month, the World Bank cut its global growth forecast to 2.9 per cent from last June's 3.3 per cent outlook.

CHINESE SLOWDOWN: The world's second-largest economy cooled further in the latest quarter, dragging 2015's growth to a 25-year low of 6.9 per cent. The slowdown has dampened demand for goods from oil to iron to heavy machinery. Anxiety over China's outlook has contributed to oil prices falling to 12-year lows.

THE QUOTE: "The stabilisation we saw yesterday now appears to have only been a pause" in volatility for financial markets, said IG analyst Angus Nicholson in a report. "China's somewhat mystifying 3 per cent rally in the Shanghai Composite was quickly lost at the open, killing sentiment across the whole Asian region."

ASIA'S DAY: Tokyo's Nikkei 225 fell 3.7 per cent to 16,416.19 and Hong Kong's Hang Seng retreated 3.8 per cent to 18,886.30. The Shanghai Composite Index lost 1 per cent to 2,976.69 and South Korea's Kospi was off 2.3 per cent at 1,845.45. Australia's ASX/S&P 200 shed 1.3 per cent to 4,841.50. India's Sensex was down 1.9 per cent at 24,005.56. Markets in Southeast Asia also retreated.

WALL STREET: U.S. stocks struggled through turbulent trading Tuesday and eked out small gains, led by utility and consumer stocks. The Dow rose as much as 183 points in the first minutes of trading Tuesday. Gains faded in the afternoon before a late spurt of buying. The Dow ended up 27.94 points, or 0.2 per cent, at 16,016.02. The S&P 500 rose one point to 1,881.33. The Nasdaq composite index fell 11.47 points, or 0.3 per cent, to 4,476.95. Major indexes had plunged Friday, and the Dow and S&P 500 are coming off their worst opening weeks of a year in history.

ENERGY: Benchmark U.S. crude for March delivery was down 88 cents at $28.70 per barrel in electronic trading on the New York Mercantile Exchange. The February contract, which expires Wednesday, fell 96 cents to $28.46 on Tuesday. Brent crude, a benchmark for international oils, lost 60 cents to $28.16 in London. The contract rose 21 cents on Tuesday to close at $28.76.

CURRENCIES: The dollar declined to 116.20 yen from 117.46 in the previous trading session. The euro rose to $1.0964 from $1.0922.



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