World stocks fall amid drop in oil price

LONDON -- World stock markets fell Thursday as investors took profit from recent rises and energy stocks were hit by a big drop in oil prices.

In afternoon trading in Europe, Germany's DAX was down 0.3 percent to 5,688.33, Britain's FTSE 100 lost 0.3 percent to 5,125.55, and France's CAC 40 dropped 0.5 percent to 3,804.15.

Stock futures pointed to a lower opening on Wall Street. Dow Jones industrial average futures shed 0.1 percent to 9,703, and Standard & Poor's 500 futures slipped 0.1 percent to 1,057.60.

In Asia, Hong Kong's Hang Seng index was the biggest loser, falling 544.79, or 2.5 percent to 21,050.73. South Korea's Kospi declined 17.59, or 1 percent, to 1,693.88.

The declines came after the Federal Reserve kept interest rates unchanged at a regular meeting Wednesday, as widely expected, and said the pace of economic activity has improved since August.

On Thursday, investors will get more clues on how the U.S. economy is faring when data on jobs and housing is published.

They will also be keeping an eye on the Group of 20 meeting of the world's leading economies on Thursday and Friday in Pittsburgh. Later, investors in Germany will turn their attentions to Sunday's national election.

In Europe and Asia, lower oil prices weighed on energy stocks. The price of crude fell nearly 4 percent Wednesday on an unexpected jump in U.S. inventories that suggested consumer demand remains weak. Benchmark crude for November delivery was down 58 cents at $68.39 in European trade Thursday.

"That's taking a shine off indexes but I think that's very short term," said Jane Coffey, head of equities at Royal London Asset Management. "The market's really waiting to see what's going to come out of the G-20. We're in a bit of a waiting mode rather than moving forward or having any worries about going backwards."

Profit-taking among short-term investors was also playing a role in market movements and is "a stark reminder that sunny optimism can last for only so long without faltering, especially in the midst of a global downturn," said Anthony Grech, market strategist at IG Index.

Most Asian markets lost ground, including Australia's benchmark, down 0.7 percent, as lower oil prices hit commodity stocks. India's Sensex was off 0.8 percent. Markets in the Philippines, New Zealand and Singapore also fell but China's Shanghai index gained 0.4 percent.

The declines came after the Federal Reserve said it would again slow some of its purchases of mortgage-backed securities, which have been part of the extraordinary support the central bank has given the U.S. economy over the past year.

Investors have focused on when central bankers and governments will begin to unwind some of the measures they have taken to boost the global economy since the onset of the global financial crisis one year ago.

"I think people get scared when the central bankers talk about the withdrawal from the market," said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. "I think investors got coddled by the government for too long."

Japan's Nikkei 225 stock average, closed for the first three days of this week due to a string of national holidays, was Asia's bright spot, gaining 173.68, or 1.7 percent, to 10,544.22.

In Tokyo trade, ailing Japan Airlines Corp. dived 15.8 percent as its president met with officials to appeal for taxpayer funds to keep the carrier flying.

Struggling Japanese consumer finance company Aiful Corp. plunged 23.9 percent after forecasting an annual loss and saying it will cut 2,000 jobs, or about 44 percent of its workers.

In New York on Wednesday, the Dow Jones industrial average fell 81.32, or 0.8 percent, to 9,748.55. Broader indexes also declined.