Tuesday, August 2, 2011

Markets fret over U.S. economy despite debt deal

Global stock markets tumbled Tuesday after downbeat U.S. data fuelled fears the world's largest economy might be sliding back into recession.

Oil prices fell to near $94 a barrel on expectations slowing global economic growth will reduce demand for crude.

In Europe, Germany's DAX opened down 0.5 percent. France's CAC-40 shed 0.2 per cent and London's FTSE was down 0.3 per cent.

Wall Street was poised to fall. Dow futures were off 0.3 per cent at 12,001.

Japan's Nikkei 225 closed down 1.2 percent to 9,844.59 and China's Shanghai Composite Index lost 0.9 per cent to 2,976.26. Hong Kong's Hang Seng shed 1.1 per cent to 22,421.46. Seoul, Taipei, Sydney, Singapore and Mumbai also fell.

The declines came despite an agreement by U.S. lawmakers to raise Washington's $14.3 trillion debt ceiling and followed the release Monday of a disappointing survey of American manufacturing activity.

The Institute for Supply Management's index for July dropped to 50.9 from the previous month's 55.3, indicating a slowdown. (more)