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London: European and US stock markets fell yesterday after further dismal economic data. Asian markets were higher after Wall Street's rebound the previous session.
The FTSE 100 index of leading British shares was down 76.52 points, or 1.9 per cent, at 4,046.34, with heavyweight oil stocks BP PLC and Royal Dutch Shell down 3.4 per cent and 4.2 per cent as oil prices earlier fell to a three-year low below $47 (Dh172.9) a barrel.
Meanwhile Germany's DAX was 142.90 points, or 3.2 per cent, lower at 4,388.89. The CAC-40 in France was down 92.02 points, or 2.9 per cent, at 3,060.88.
So far this week, the markets have been gaining one day and retreating the next, as the optimism that fuelled last week's rally has evaporated amid poor economic news.
"Financial markets are expected to remain volatile for some time, as they take on board two sets of issues, the credit crisis and the economic crisis," said Andrew Milligan, head of global strategy at Standard Life Investments.
A raft of data yesterday reinforced investor concerns about the US and European economies.
The employment report from the ADP payrolls firm made for particularly grim reading and stoked fears that tomorrow's government jobs report will be worse than expectations.
ADP's report showed that 250,000 jobs were lost in November, more than the 205,000 anticipated.
As a result, a number of analysts have downwardly-revised their expectations for tomorrow's data, with some now projecting that around 350,000 jobs were lost in November.
The consensus at the moment is that around 325,000 jobs were shed during the month.
The disappointing data was not just confined to the US though.
The euro zone service sector purchasing managers index, or PMI, fell to 42.5 in November, below the preliminary estimate of 43.3 and October's 45.8. November's reading was the lowest in the survey's ten-year history.
Meanwhile, the equivalent survey into the British services sector was even worse. The PMI dropped to 40.1 in November from 42.4 the previous month. November's reading was the lowest since the survey began in 1996.
For both surveys, a reading below 50 indicates contraction and the lower the number below 50 the greater the contraction.
The data has stoked expectations that Europe's two leading central banks may cut interest rates more aggressively today as the economic news keeps on coming in worse than anticipated.
While many observers think the European bank will reduce its benchmark rate by half a percentage point to 2.75 per cent - with some thinking it may cut by three quarters of a point - the Bank of England is expected by many to lower its rate by a whole percentage point to two per cent, which would be equal to its lowest since the bank was founded in 1694.
Earlier, Japan's Nikkei 225 stock average rose 140.41 points, or 1.8 per cent, to 8,004.10 after the 3.3 per cent advance on the Dow Jones industrial average on Tuesday.
Benchmark indexes in Hong Kong, China, Australia, Singapore and India also inched higher as investors nibbled on shares after broad declines the day before.
Shares in Australia pared a two per cent gain to close almost flat after the Australian government announced the economy slowed to growth of just 0.1 per cent in the third quarter, the slowest pace in eight years. Qantas Airways was up 4.4 per cent on news of merger talks with British Airways.
Shares in Thailand rose 1.6 per cent after a court ruling dissolved the ruling party for electoral fraud, lancing weeks tensions in which protesters occupying Bangkok's two airports. The country's central bank also announced its biggest cut to interest rates in eight years.
South Korea bucked the trend, slipping 0.1 per cent and Taiwan's benchmark fell 1.1 per cent.
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