SINGAPORE (AP) -- World stock markets dropped Thursday as the U.S. Federal Reserve failed to reassure investors that a lasting recovery in the global economy was taking hold.
The U.S. central bank decided Wednesday to keep a key interest rate at a record low and said cheap credit would continue for an "extended period" as the world's largest economy struggles to regain its footing after its worst downturn in decades.
For many investors, the news raised doubts about whether the turnaround under way in many economies was strong enough to extend a powerful eight-month rally in global markets. A key U.S. unemployment report due Friday, which could yield clues about the ailing U.S. consumer and demand for Asian exports, also kept traders on edge.
"Around these levels, it's hard to have conviction positions," said Jan Lambregts, head of research of Rabobank in Hong Kong. "There's a big question on investor confidence given issues about the sustainability of the global recovery once stimulus policies fade."
As trading got under way in Europe, benchmarks in Britain and Germany dropped 0.9 percent, while France's market fell 0.7 percent.
Earlier, Japanese shares helped lead Asian stocks lower, with the Nikkei 225 stock average falling 126.87 points, or 1.3 percent, to 9,717.44, as the strengthening yen undermined the competitiveness of the country's exports.
"The Japanese export sector is being killed by the yen, and I think yen strength is here for quite a while," Lambregts said.
South Korea's market pulled back 1.8 percent to 1,552.24, while Hong Kong's Hang Seng was down 0.6 percent at 21,479.08 and India's market shed 0.2 percent. Markets in Indonesia, Singapore and Australia also slid. Chinese shares, though, bucked the downward trend to gain modestly.
Among stocks, Japan's Nissan Motor Co. edged up 0.3 percent after returning to a profit last quarter and predicting a narrower loss for the fiscal year with the help of stronger demand in China.
Wall Street traded largely sideways on Wednesday.
The Dow rose 17.53, or 0.3 percent, to 9,802.14. The broader Standard & Poor's 500 index rose 1.09, or 0.1 percent, to 1,046.50.
U.S. futures augured a lower open on Thursday. Dow futures shed 23 points, or 0.2 percent, to 9,762, while S&P futures lost 3.50, or 0.3 percent, to 1,043.50.
Oil prices fell in Asia, with benchmark crude for December delivery down 57 cents to $79.83 a barrel. The contract gained 80 cents overnight.
Gold, meanwhile, rose $1, or about 0.1 percent, to $1,088.40 an ounce.
The dollar slipped to 90.27 yen from 90.77 yen. The euro fell to $1.4826 from $1.4872.
The U.S. central bank decided Wednesday to keep a key interest rate at a record low and said cheap credit would continue for an "extended period" as the world's largest economy struggles to regain its footing after its worst downturn in decades.
For many investors, the news raised doubts about whether the turnaround under way in many economies was strong enough to extend a powerful eight-month rally in global markets. A key U.S. unemployment report due Friday, which could yield clues about the ailing U.S. consumer and demand for Asian exports, also kept traders on edge.
"Around these levels, it's hard to have conviction positions," said Jan Lambregts, head of research of Rabobank in Hong Kong. "There's a big question on investor confidence given issues about the sustainability of the global recovery once stimulus policies fade."
As trading got under way in Europe, benchmarks in Britain and Germany dropped 0.9 percent, while France's market fell 0.7 percent.
Earlier, Japanese shares helped lead Asian stocks lower, with the Nikkei 225 stock average falling 126.87 points, or 1.3 percent, to 9,717.44, as the strengthening yen undermined the competitiveness of the country's exports.
"The Japanese export sector is being killed by the yen, and I think yen strength is here for quite a while," Lambregts said.
South Korea's market pulled back 1.8 percent to 1,552.24, while Hong Kong's Hang Seng was down 0.6 percent at 21,479.08 and India's market shed 0.2 percent. Markets in Indonesia, Singapore and Australia also slid. Chinese shares, though, bucked the downward trend to gain modestly.
Among stocks, Japan's Nissan Motor Co. edged up 0.3 percent after returning to a profit last quarter and predicting a narrower loss for the fiscal year with the help of stronger demand in China.
Wall Street traded largely sideways on Wednesday.
The Dow rose 17.53, or 0.3 percent, to 9,802.14. The broader Standard & Poor's 500 index rose 1.09, or 0.1 percent, to 1,046.50.
U.S. futures augured a lower open on Thursday. Dow futures shed 23 points, or 0.2 percent, to 9,762, while S&P futures lost 3.50, or 0.3 percent, to 1,043.50.
Oil prices fell in Asia, with benchmark crude for December delivery down 57 cents to $79.83 a barrel. The contract gained 80 cents overnight.
Gold, meanwhile, rose $1, or about 0.1 percent, to $1,088.40 an ounce.
The dollar slipped to 90.27 yen from 90.77 yen. The euro fell to $1.4826 from $1.4872.
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