World stocks slip on China growth worries

HONG KONG — World stock markets sank Tuesday over worries about slower economic growth in China and a possible snag in the deal for Greece to get its bailout money.

In early European trading, Germany's DAX was down 0.4 percent at 6,835 and the CAC-40 in France fell 0.4 percent to 3,473.81. The FTSE 100 index of leading British shares lost 0.3 percent to 5,857.35.

U.S. stocks were poised to fall. Dow futures were down 0.3 percent at 12,915. Broader S&P 500 futures were down 0.4 percent at 1,358.70.

Asian stock markets slid. Mainland Chinese shares saw their biggest loss in almost a month a day after Premier Wen Jiabao lowered the country's economic growth target to 7.5 percent from the 8 percent level it has stood at for years. The new target underlines China's emphasis on better, not faster, growth.

The benchmark Shanghai Composite Index lost 1.4 percent to 2,410.45. The Shenzhen Composite Index for China's second smaller stock market lost 1 percent to 971.8.

Wen's announcement is cause “for some concern that China might not roll out so many pro-growth policies in the near future,” said Jackson Wong, a vice president at Tanrich Securities.

Elsewhere in Asia, Japan's Nikkei 225 index dropped 0.6 percent to 9,637.63 and South Korea's Kospi shed 0.8 percent to 2,000.36.

Hong Kong's Hang Seng lost 2.2 percent to 20,806.25 and Australia's S&P/ASX 200 retreated 1.4 percent to 4,204.70. Benchmarks in Taiwan, Singapore and India also fell.

Greece's long-running debt crisis also weighed on the markets because of worries not enough investors will swap their Greek government bonds for new ones that are worth less and pay lower interest.

Greece will learn by Thursday night what percentage of private creditors will participate in the bond swap. Without the debt relief, Greece won't get a second, (euro) 130 billion ($172 billion) international bailout and would face a default on its debts.

“Before the close of business Thursday, we really don't know whether it's going to be a go,” said Wong. “So it just seems not to be very wise to get into market at this point.”

Investors may also be hanging back because they're waiting for the release of some key economic data over the next few days, Wong said. Those include a private report on U.S. payrolls on Wednesday, Chinese inflation on Thursday and U.S. jobless data on Friday.

In Hong Kong, AIA Group Ltd. tumbled 8.4 percent after New York-based insurer American International Group said it was selling off a substantial stake in the company to help repay the U.S. government for its financial crisis bailout.

Shares of companies tied to China's housing sector, such as cement companies led declines in mainland markets. So did nonferrous metal companies and coal miners.

“Investors are expecting that property policies will be tightened again in the near future and that upcoming annual and first quarter corporate earnings may be worse than earlier expected,” said Li Jianfeng, an analyst at Caida Securities, based in Shanghai. “It's the beginning of a correction.”

Shares of Industrial & Commercial Bank of China Ltd. fell 3.8 percent after the South China Morning Post newspaper, citing unnamed sources, reported that Goldman Sachs was planning to sell of a big chunk of the shares it owns in China's biggest state-owned commercial lender.

In currencies, the euro fell to $1.3182 from 1.3224 in late trading Monday. The dollar fell to 81.27 yen from 81.46 yen.

Benchmark crude for April delivery dipped 4 cents to $106.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at $106.72 per barrel on Monday.