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China economy fears, Ukraine woes drive markets

LONDON/HONG KONG--Concerns over the Chinese economy and the ongoing tensions in Ukraine continued to drive stock markets around the world lower Friday. The twin worries have had a firm grip over financial markets all week.

With traders monitoring discussions Friday between U.S. Secretary of State John Kerry and Russia Foreign Minister Sergei Lavrov in the run-up to Sunday's referendum in the Ukraine region of Crimea over joining Russia, analysts said there's unlikely to be a turnaround in sentiment.

“At the end of the week, investors will likely want to sit on their hands and monitor the outcome of U.S.-Russian talks on the Ukraine today and the outcome and aftermath of the Crimean referendum,” said Neil MacKinnon, global macro strategist at VTB Capital.

In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 6,659 while Germany's DAX fell 0.3 percent to 8,892. The CAC-40 in France was 0.6 percent lower at 4,224. The biggest casualty was Russia's main RTS index, which was trading around 3 percent lower.

Wall Street was poised to recover some of Thursday's losses. Dow futures and the broader S&P 500 futures were both 0.2 percent lower.

“With a host of geopolitical considerations to be made, there's still scope for more selling into the weekend break,” said Patrick Latchford at Valutrades.

Global Sell-off

Asian markets extended the week's losses on Friday, following a heavy sell-off in New York and Europe in reaction to another batch of poor Chinese data and flaring tensions in Ukraine.

Traders scurried into lower-risk assets such as the yen owing to growing economic uncertainty and geopolitical fears.

Tokyo slumped 3.30 percent, or 488.32 points, to 14,327.66, Seoul fell 0.75 percent, or 14.48 points, to 1,919.90 and Sydney gave up 1.54 percent, or 83.2 points, to close at 5,329.4.

Shanghai lost 0.73 percent, or 14.77 points, to 2,004.34 while Hong Kong closed 1.00 percent lower, shedding 216.59 points to 21,539.49.

Apart from mild bargain-buying gains on Tuesday and Thursday, regional shares have been in a downward spiral this week since China said at the weekend it had seen a surprise trade deficit in February and exports had slumped.

The selling was fanned on Thursday when Beijing released fresh figures showing industrial production rose at its slowest pace in five years in January and February, while consumer spending saw its weakest increase for three years.

With China — a crucial driver of global growth — releasing a series of downbeat economic data, investors are shifting into safer investments, predominantly hitting equities.

'Nikkei suffers double-whammy'

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