World stocks mixed on new worries over US recovery

BANGKOK — World stocks were mixed Monday in light trading, with some markets dragged down by a disappointing jobs report from the US and concerns over bank lending and slackening growth in China. Oil prices hovered above $73 a barrel in Asia as investors worried about a weak US economic recovery. The dollar was up against the yen, and the euro also weakened. Shares in Europe generally headed lower in early trading, with the key British FTSE 100 of leading shares down 0.3 percent to 4,823.04 and the CAC-40 in Paris lower by 0.1 percent to 3,346.15. Germany's DAX was up 3.66 points to 5,837.71. Investor anxiety hit Asia as well. While key indexes in Japan and South Korea closed slightly up, Hong Kong and Shanghai ended in negative territory — with traders watching pessimistically from the sidelines, waiting out Monday's holiday in the US amid a scarcity of positive economic news. "People are waiting for some breakthrough, like a reversal in China or an indicator in the US to show the economy is on track to recover," said Jackson Wong, vice president at Tanrich Securities in Hong Kong. "People are a little scared to buy right now." Worries that massive bank lending in China last year, intended to support Beijing's stimulus program, may spark a wave of defaults was also weighing on investor sentiment, Wong said. Analysts worry that Chinese companies overspent on factories and other assets and may be unable to repay their debts. Also, local government finance agencies borrowed heavily for infrastructure and other projects, and the World Bank and Chinese regulators say lenders might face losses if those agencies default. Premier Wen Jiabao, China's top economic official, said over the weekend its recovery is facing more problems than expected. Indicators from manufacturing to auto sales suggest economic growth might slow. The benchmark Shanghai Composite Index lost 18.95 points, or 0.8 percent, to close at 2,363.95, the lowest level in 15 months. Kazuhiro Takahashi, an equity strategist at Daiwa SMBC Securities Co. Ltd., said the Nikkei climbed on bargain-hunting following earlier losses. "Investors chased gains in exporters, but many took a wait-and-see stance as the US financial markets are closed Monday," Takahashi said. "The disappointing U.S. jobs report was a fresh sign that the pace of the US economic recovery is slower than expected." Japan's benchmark Nikkei 225 stock index added 63.07 points, or 0.7 percent, to 9,266.78. South Korea's Kospi increased 0.2 percent, to 1,675.37, and Australia's S&P/ASX 200 was down 0.4 percent at 4,222.1. Elsewhere, Hong Kong's Hang Seng index fell 0.3 percent to 19,842.20. Markets in Taiwan and New Zealand edged up. Investors in Asia were also reluctant to chase gains after the Dow Jones industrial average fell 46.05 points, or 0.5 percent, to 9,686.48 Friday, the seventh-straight day of decline. It was also the longest losing streak since the height of the financial crisis in October 2008. Sentiment turned downbeat on Wall Street after the US government said Friday private employers added only 83,000 jobs last month, fewer than the 112,000 analysts had forecast. US markets are closed Monday in observance of Independence Day. In currencies, the dollar rose to 87.84 yen from 87.70 yen in New York late Friday. The euro declined to $1.2533 from $1.2556. Benchmark crude for August delivery was up 22 cents to $72.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 81 cents to settle at $72.14 on Friday. —AP