Growth worries, U.S. fiscal fears hit shares

Thu Nov 15, 2012 8:09am EST
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By Richard Hubbard

LONDON (Reuters) - World equity markets fell for a seventh day on Thursday, hit by evidence that Europe's debt crisis has stalled economic growth and by persistent concern over the budget problems in the United States.

Stock index futures pointed to a slight recovery on Wall Street later, though data on the jobs market, consumer price inflation and business activity in New York and Philadelphia could have a big impact on sentiment. .N

Brent crude oil jumped to $111 a barrel as fighting in the Gaza Strip sparked worries of an escalation that could ultimately disrupt oil supplies from the Middle East.

"The global economy faces some severe headwinds. Against that backdrop we see short-term de-risking of portfolios," said Abi Oladimeji, head of investment strategy at Thomas Miller Investment.

The FTSEurofirst 300 index .FTEU3 of top European shares was down 0.7 percent at 1,080.62 points, having fallen 1 percent on Wednesday, but actual trading volume was quite low. London's FTSE 100 .FTSE, Frankfurt's DAX .GDAXI and Paris's CAC-40 .FHCI were down around 0.5 to 0.9 percent. .EU .L

Growth in Germany, Europe's largest economy, cooled to 0.2 percent over the July-September period compared with the previous three months, while data showed the wider 17-nation euro zone has slipped back into recession.

Economic output in the euro area fell 0.1 percent in the third quarter after falling 0.2 percent in the April to June period, making it the second recession since 2009.

"The double-dip is a fact," said Martin Van Vliet, an economist at ING Bank. "What you notice is that the recession in southern Europe is slowly creeping to other countries."   Continued...

A trader checks screen data at the IG Index trading floor in London, December 9, 2011. REUTERS/Finbarr O'Reilly