World stocks down as worries over Greece grow

BANGKOK (AP) -- Doubts that European Union leaders will come even close to cobbling together a plan to kick-start the region's faltering economy sent world stock markets lower Wednesday.

Leaders of the 27 EU countries are to meet in Brussels later in the day for a summit expected to deal with Europe's economic woes but also ways to prevent debt-mired Greece from skidding into a chaotic bankruptcy.

A failure to make headway risks jolting stock markets further, analysts said.

"Unless there are dramatic developments at today's summit, risk assets are set to continue to remain under pressure," analysts at Credit Agricole CIB in Hong Kong said in an email.

Britain's FTSE 100 opened 1.5 percent lower at 5,321.30. Germany's DAX lost 1.6 percent to 6,336.22 and France's CAC-40 fell 1.4 percent to 3,041.43.

Wall Street headed for another day of losses, with Dow Jones industrial futures down 0.5 percent to 12,410 and S&P 500 futures 0.6 percent lower at 1,306.50.

Investors have long acknowledged the possibility of a Greek withdrawal from the 17-nation euro currency union as the country struggles to meet harsh austerity targets that are a condition of getting international bailout money.

But a financial news service's report, which quoted former Greek Prime Minister Lucas Papademos suggesting such a euro exit could be approaching, flustered Asian markets earlier in the day.

"I think investors now are concerned that Greece may finally leave the euro currency union," said Dickie Wong of Kingston Securities Ltd. in Hong Kong.

Another big worry for investors is a slowdown in Chinese growth, compounded by a reluctance of Chinese companies to borrow because of uncertainty about the economy.

Japan's Nikkei 225 index tumbled 2 percent to close at 8,556.60. The Bank of Japan on Wednesday left its key interest rate unchanged at near zero as widely expected.

Hong Kong's Hang Seng fell 1.3 percent to 18,786.19 and South Korea's Kospi lost 1.1 percent at 1,808.62. Australia's S&P/ASX 200 lost 1.3 percent to 4,067.

Falling oil and metal prices hurt commodity shares. Energy Resources of Australia fell 2 percent. China National Offshore Oil Corp. lost 1 percent. Aluminum Corp. of China lost 2.7 percent.

Asian companies deriving significant sales revenue from exports slumped a day after the Organization for Economic Cooperation and Development warned that euro countries are at risk of falling into a "severe recession."

Hong Kong-listed China Shipping Container Lines Co. plunged 5 percent. Japan's Yamaha Motor Corp. tumbled 5.3 percent.

But Mazda Motor Corp. rose 0.9 percent after the company said it was working with Fiat SpA of Italy to develop and manufacture a roadster, or two-seater convertible.

Benchmark oil for July delivery was down 88 cents to $90.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.01 to settle at $91.85 in New York on Tuesday.

In currencies, the euro fell to $1.2641 from $1.2756 late Tuesday in New York. The dollar fell to 79.42 yen from 79.92 yen.