Awwal 07, 1432, Feb 10, 2011, SPA -- World shares retreated Thursday as a mixed finish on Wall Street offered little incentive to buy and China's interest rate hike sent waves of caution through the markets, according to AP. Oil prices hovered below $87 a barrel after a report showed OPEC boosted crude output last month to two-year high. In currencies, the dollar was up against the yen and the euro. European markets fell in early trading. Britain's FTSE 100 was down 0.3 percent to 6,036.25. France's CAC-40 fell 0.2 percent to 4,080.97. Germany's DAX was 0.3 percent down to 7,303.42 despite initial optimism over a possible merger between NYSE Euronext Inc. and Deutsche Boerse, owner of the Frankfurt stock exchange. U.S. futures were headed south ahead of the opening bell. Dow futures were down 0.2 percent to 12,180 while S&P 500 futures fell 0.3 percent to 1,315.30. Japan's Nikkei 225 stock average slipped 0.1 percent to 10,605.65 as investors shied away from big moves ahead of a long weekend. Automaker Nissan Motor Co. tumbled 2.8 percent despite reporting a 78 percent jump in quarterly profit and raising its full-year earnings forecasts. Other Japanese blue chips stalled, including Honda Motor Corp., down 1 percent, and Toshiba Corp., down 0.8 percent. Hong Kong's Hang Seng index took a wallop, sliding 2 percent to 22,708.62 _ its first close below 23,000 this year _ as a fall in oil prices hurt mainland China energy shares. Sinopec Group, China's biggest oil refiner, was down 3.4 percent and PetroChina Co. Ltd. dropped 3 percent. Property shares also sank. China Resources Land Ltd. and China Overseas Land and Investment both dropped by 3.6 percent. Meanwhile, Hong Kong Exchanges and Clearing Ltd., the company that runs the territory's stock exchange, was 4.9 percent lower _ and one of the most traded stocks of the day _ amid a flurry of merger discussion among global stock exchanges. Benchmarks in Taiwan, Singapore and New Zealand were also down. Inflation remained high on Asia's worry list two days after China's central bank hiked interest rates for the second time in little over a month to tamp down stubborn inflation. Investors worry that could slow economic growth elsewhere given China's increasingly important role in the global economy. South Korea's Kospi slid 1.8 percent to 2,008.50, with tech and financial issues having a sluggish day, ahead of an interest rate decision by the Bank of Korea on Friday. «China's surprising rate hike ... has increased the likelihood that the BOK may also move,» analysts at DBS Bank Ltd. in Singapore said. «It is alarming that inflation has started to spread to broader areas in the economy,» the said. David Cohen, an economist with Action Economics in Singapore, said the acceleration in food and oil prices has caught the attention of the markets and Asian central banks. «They are watching nervously and concerned that they not let inflation get out of hand,» he said. However, there was still room for growth despite talk of the region's economies overheating. «You could still argue that, so far, most of the region is not yet pushing full capacity. We're still in the recovery process.» Australia's S&P/ASX 200 clung on to gains, with the index rising 0.2 percent to 4,914.40. Notable risers included Australian stock exchange operator ASX Ltd., which surged 4.7 percent on fresh hopes that its proposed business combination with the Singapore bourse would be approved. Bucking the trend was China, where investors snapped up bargains in banks and property shares following a selloff that was sparked by China's latest interest rate hike. The benchmark Shanghai Composite shot up 1.6 percent to 2,818.16 and the Shenzhen Composite Index for China's smaller market surged 2.9 percent to 1,220.58. In New York on Wednesday, stocks finished mixed after the head of the Federal Reserve said unemployment may remain high for several years. The Dow Jones industrial average rose 6.74 points, or 0.1 percent, to 12,239.8 in its eighth straight day of gains. The broader Standard & Poor's 500 lost 3.69 points, or 0.3 percent, to 1,320.88. It was the first down day for the index after four days of gains. The Nasdaq composite lost 7.98, or 0.3 percent, to 2,789.07. In currencies, the dollar edged up to 82.74 yen from 82.39 yen late Wednesday. The euro stood at $1.3644 from $1.3724. Benchmark crude for March delivery was down 46 cents at $86.25 on the New York Mercantile Exchange. Oil prices fell Wednesday after the government reported U.S. crude oil supplies rose last week, and new data showed OPEC production was the highest in more than two years. The contract lost 23 cents to settle at $86.71 on Wednesday.
