Global shares down; fears of cooling measures hit China
SINGAPORE (Reuters) - Global stocks fell on Tuesday, with Japan retreating on a surprise drop in machinery orders amid nagging worries over the U.S. economy, while Chinese shares sank on fears regulators would move to cool the heated market.
London stocks initially opened lower to extend Monday's losses, but by 0728 GMT Britain's FTSE 100 .FTSE index was up 0.23 percent. Germany .GDAXI was little changed and France's main index .FCHI was marginally lower.
The yen matched a three-month low against the dollar on the weak machinery orders, a barometer of corporate capital spending, which underscored expectations the Bank of Japan will raise interest rates only gradually.
Copper extended its fall in Asia, with Shanghai copper down
by its 4 percent daily limit, after a 3 percent decline in London. Gold rebounded after sliding on Monday.
China's main stock index .SSEC slid 3.6 percent as institutional investors dumped shares on mounting worries that regulators would take measures to cool a market that has more than tripled since the start of 2006.
The China Securities Regulatory Commission warned over the weekend stock market had become more risky as valuations jumped. But the market defied those warnings on Monday to hit an intraday record high.
"Now institutions are worrying about possible concrete steps to cool the market, and we expect they will happen," said Zheng Weigang, senior stock analyst at Shanghai Securities.
Japan's Nikkei average .N225 lost nearly 1 percent, with industrial robot maker Fanuc Ltd. (6954.T) retreating a similar amount, while the broad TOPIX index fell 1.1 percent.
Japan's core private-sector machinery orders fell 4.5 percent in March, against forecasts for a 1.3 percent rise, data showed. ID:nT303786
"Machinery data, especially a negative forecast for April-June, dampened market sentiment," said Yasuo Yabe, director of sales at Meiwa Securities.
"Market participants had braced for a scenario that the Japanese economy will soon come out of stagnation and regain strength. But today's data made them question it," he said.
The data showed manufacturers expect core machinery orders to fall 11.8 percent in April-June on the previous quarter. Japan reports first-quarter gross domestic product figures later this week.
The auto sector offered some relief. News that Germany's DaimlerChrysler DCXGn.DE had found a buyer for its Chrysler unit raised hopes for industry consolidation and supported shares such as Toyota Motor Co. Ltd. (7203.T).
South Korean auto makers such as Hyundai Motor (005380.KS) rose 0.62 percent on the Chrysler news, even though Korean firms were unlikely to be involved in consolidation. Continued...
