World markets fall as weak US housing figures offset earnings optimism

By Stephen Wright, The Associated Press

BANGKOK, Thailand - World stock markets faltered Wednesday as signs of weakness in the U.S. housing sector tempered optimism about better-than-expected company earnings.

Asia's modest fall followed losses on Wall Street after the government said applications for home building permits slipped in September by the largest amount in five months while construction of new homes and apartments was weaker than anticipated.

The figures were a discouraging signal for future construction in the world's largest economy and diluted the enthusiasm generated by a string of improved quarterly results from U.S. corporate heavyweights.

Also weighing on Asian markets were falls in oil prices, which touched a year high on Tuesday, and other commodities as the dollar steadied.

"Anemic growth in the latest U.S. housing starts disappointed investors," said Hiroaki Mino, market analyst at Mizuho Investors Securities Co. Ltd.

As trading got underway in Europe, Britain's FTSE 100 was off 0.2 per cent, Germany's DAX fell 0.4 per cent and France's CAC-40 lost 0.5 per cent.

In Asia, Japan's Nikkei 225 stock average slipped 3.45 points, or less than 0.1 per cent, to 10,333.39.

Hong Kong's Hang Seng dropped 66.85, or 0.3 per cent, at 22,318.11 and South Korea's Kospi retreated 0.3 per cent to 1,653.86.

Elsewhere, Australia's index slipped 0.2 per cent, Singapore's market was down 0.3 per cent and China's Shanghai benchmark fell 0.5 per cent.

In the U.S. on Tuesday the Dow fell 50.71, or 0.5 per cent, to 10,041.48.

The broader Standard&Poor's 500 index fell 6.85, or 0.6 per cent, to 1,091.06. The index, the basis of many mutual funds, is up 61.3 per cent from a 12-year low in early March.

Stock futures pointed to another weak session for Wall Street on Wednesday. Dow futures were down 10, or 0.1 per cent, at 9,990.

Oil prices fell for a second day in Asia as investors eyed a bigger-than-expected U.S. crude inventory increase and weak economic data.

Benchmark crude for December delivery fell 59 cents to $78.52 a barrel at midday Singapore time. The contract slid 84 cents to settle at $79.12 on Tuesday.

In currencies, the dollar fluctuated, trading higher at 90.74 yen from 90.69 yen. The euro rose to $1.4953 from $1.4933.