World stock markets dropped Thursday after the Federal Reserve issued a weaker economic forecast for the U.S. and China posted slower growth, cooling investor sentiment, according to AP. Oil prices fell below $77 a barrel amid mixed signals about U.S. crude demand. The yen strengthened against the dollar, while the euro rose slightly. Following big gains the previous day, indexes in Asia slipped into negative territory after a weaker U.S. economic forecast and disappointing retail sales figures gave traders a reason to take profits and avoid risk. Wall Street was poised to open lower, with Dow futures down 0.2 percent to 10,281 and the S&P 500 futures lower by 0.2 percent to 1,089.20. As trading got under way in Europe, Britain's FTSE 100 index was down 0.4 percent to 5,232.49, while Germany's DAX was lower by 0.3 percent to 6,193.38 and France's CAC-40 fell 0.3 percent 3,621.50. Japan's Nikkei closed at 9,685.53, down 109.71 points, or 1.1 percent. Benchmarks across Asia _ including South Korea, Hong Kong, India and New Zealand _ also closed lower. Figures from China, meanwhile, showed its rapid growth is slowing as the impact of its massive stimulus eases and Beijing clamps down on a credit boom. The world's third-largest economy grew by 10.3 percent in the second quarter over a year earlier, down from the first quarter's explosive 11.9 percent expansion. The news was not a major surprise but _ combined with a disappointing trading debut by Agricultural Bank of China Ltd. _ dampened investor confidence and caused Chinese markets to head south, according to Kwong Ban Mun, chief operating officer at KGI Asia Ltd. in Hong Kong. «Investors are concerned about the growth side and disappointment over the debut of the ABC,» Kwong said, referring to the Agricultural Bank. «Together, that put pressure on China's stock market and that indirectly affects the Hong Kong market.» Agricultural Bank of China was barely changed in its trading debut in Shanghai _ versus expectations of a large jump in price _ after raising up to $22.1 billion in a mammoth initial public offering. Wall Street had a mixed day Wednesday after the Federal Reserve said that gross domestic product, the broadest measure of the economy, will grow between 3 percent and 3.5 percent this year, down slightly from its forecast in April. Analysts said the announcement was not a surprise. «It wasn't a shock. It's everything we already knew,» said Jackson Wong, vice president at Tanrich Securities in Hong Kong. In Tokyo trade, a stronger yen weighed on exporters. Sony Corp. lost 2.4 percent, and rival Panasonic Corp. fell 2.4 percent. Nissan Motor Co. was down 3.3 percent after the company said it would halt production at two U.S. plants for three days due to a shortage of electronic parts made by Hitachi Ltd. South Korea's Kospi slipped 0.4 percent to 1,751.29 and Australia's S&P/ASX 200 fell 0.4 percent to 4,442.6. The Hang Seng closed down 1.5 percent to 20,255.62 and the Shanghai Composite index dropped 1.9 percent to 2,424.30. In New York Wednesday, the Dow Jones industrials rose just .04 percent to 10,366.72, while the broader Standard & Poor's 500 index fell 0.02 percent to 1,095.17. In currencies, the dollar fell to 87.87 yen from 88.41 yen late Wednesday. The euro rose to $1.2742 from $1.2738. Benchmark crude for August delivery was down 19 cents to $76.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents to settle at $77.04 on Wednesday.
