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World stocks lower amid Greek political turmoil
World stocks lower as debt-strapped Greece grapples with political turmoil
By The Associated Press

BANGKOK (AP) ' World stocks stalled Monday as investors remain unsure whether Greece will be able to work itself out of a debt crisis despite a weekend deal by the country's leaders aimed at implementing a controversial austerity program.

Oil prices fell below $94 per barrel, while the dollar gained against the euro but slipped against the yen.

European shares were lower in early trading. Britain's FTSE 100 fell 0.6 percent to 5,495.49. Germany's DAX dropped 1.6 percent to 5,868.73 and France's CAC-40 lost 1.6 percent to 3,072.54.

Wall Street appeared headed for losses, with Dow Jones industrial futures down 1 percent at 11,827. S&P 500 futures slumped 1.2 percent to 1,236.60.

Asian shares fell earlier in the day. Japan's Nikkei 225 index dropped 0.4 percent to close at 8,767.09. South Korea's Kospi lost 0.5 percent to 1,919.10 and Australia's S&P/ASX 200 was down 0.2 percent at 4,273.40.

Hong Kong's Hang Seng sank 0.8 percent to 19,677.89. Mainland China's benchmark Shanghai Composite Index lost 0.7 percent to 2,509.80 and the Shenzhen Composite Index lost 0.6 percent to 1,065.31.

Benchmarks in Taiwan, Thailand and Indonesia were higher.

Global stock markets have been rattled for the past week over uncertainty surrounding Greece. Investors worry that a default by Athens on its debts could cripple European banks and cause fiscal strain on much larger European countries like Italy.

"Italy worries are a current topic as well," said Jackson Wong, vice president at Tanrich Securities in Hong Kong. Interest rates on 10-year bonds reached a euro-era high of over 6 percent last week, which Wong said "is worrisome."

"Things can change quickly in Europe. Investors need to keep that in mind," he said.

Italy's borrowing costs to service its enormous public debt have been rising since the summer. While central bank chief Ignazio Visco insists Italy can survive with rates of up to 8 percent, the extra cost of borrowing could put the country on the kind of downward spiral that decimated Greece's balance sheet.

And while Europe has bailed out Portugal and Ireland, Italy might be too big to bail out.

On Wall Street on Friday, stocks fell on concerns that Greece might not go through with a plan hammered out by European leaders that requires Greece to implement harsh austerity measures in exchange for billions of euros in financial assistance.

The Dow fell 0.5 percent to close at 11,983.24. The Standard & Poor's 500 index fell 0.6 percent to 1,253.23. The Nasdaq composite shed 0.4 percent to 2,686.15.

Over the weekend, Prime Minister George Papandreou and conservative opposition head Antonis Samaras agreed to form an interim government whose main task would be to ensure implementation of the austerity program.

Stocks plunged early last week after Papandreou shocked investors with an announcement that he would put the country's austerity plan to a public vote. He backed away from the plan, but investors remain unnerved.

In one bright spot Friday, the U.S. Labor Department raised its estimates for job growth. The nation added 80,000 jobs last month, the 13th consecutive month of gains. The government also said a total of 102,000 more jobs were added in August and September than had been previously reported.

In Tokyo trade, Japanese exporters posted losses, hit by sustained strength in the yen, which erodes their overseas profits. Nissan Motor Corp. dropped 1.6 percent, while Toshiba Corp. dipped 1.7 percent. Honda Motor Corp. fell 1.1 percent.

In Hong Kong, the most actively traded shares include China Construction Bank, down 2.9 percent, and China National Offshore Oil Corp., or CNOOC, down 2.2 percent. Gainers include China Life Insurance, up 1.5 percent.

Beverage business Tingyi Holding Corp. shot up 9.4 percent in Hong Kong. PepsiCo Inc. agreed Friday to swap its holdings in its mainland China bottling operations for a stake in Tingyi to beef up its distribution in the fast-growing Chinese market.

Mainland Chinese shares lost ground after the government reiterated its determination to keep a tight rein on the housing market.

China Merchants Property lost 1.6 percent while China Vanke, the industry leader, lost 2 percent.

"The losses today mainly followed Premier Wen Jiabao's insistence that property-tightening measures must continue with the aim of returning prices to 'reasonable levels,'" said Hu Yi, an analyst at China Jianyin Investment Securities.

Australia's Fortescue Metals Group fell 3.9 percent while Orica Ltd., an Australian explosives maker and mining services supplier, jumped 4.6 percent after reporting net profit rose 4 percent and forecasting further profit growth for the year.

Benchmark crude for December delivery was down 33 cents at $93.96 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 19 cents to settle at $94.26 in New York on Friday.

In currencies, the euro fell to $1.3713 from $1.3778 late Friday in New York.

The dollar fell to 78.07 yen from 78.16 yen.


AP researcher Fu Ting contributed from Shanghai.

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