World stocks down as US stimulus jitters mount
AP and AFP
December 13, 2013, 12:13 am TWN
KUALA LUMPUR/HONG KONG--World stock markets extended losses Thursday after an apparent budget deal in the U.S. Congress reinforced expectations the Federal Reserve will cut its monetary stimulus as early as next week.
In Europe, Britain's FTSE 100 fell 0.4 percent to 6,479.49. Germany's DAX shed 0.4 percent to 9,044.86 and France's CAC-40 was nearly flat at 4,086.31.
Futures suggested Wall Street would eke out gains after disappointing earnings from a handful of U.S. companies pushed the stock market to its biggest loss in five weeks on Wednesday. Dow Jones and S&P 500 futures were both up 0.1 percent.
U.S. lawmakers look set to agree on a modest U.S. budget agreement that restores about US$63 billion in across-the-board automatic spending cuts and would help prevent another partial shutdown of the U.S. government. The 16-day shutdown in October crimped economic growth and hurt consumer confidence.
Tuesday's Democratic-Republican two-year budget deal which, if passed by Congress, would avert a shutdown crisis such as the one that paralyzed Washington in October.
While a bipartisan budget deal in Washington fuelled hopes that another government shutdown will be avoided next month, it is believed that the deal will also give the Fed more room to wind down the bond-buying scheme.