A look at economic developments around the globe

AP News
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Posted: Nov 12, 2009 1:29 PM

A look at economic developments and activity in major stock markets around the world Thursday:

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LONDON _ European stock markets gave up earlier gains as the Standard & Poor's 500 index once again failed to sustain a break above the 1,100 mark _ a level many analysts think could act as a catalyst to a further rally around the world. In Europe, the FTSE 100 index of leading British shares closed up 9.75 points, or 0.2 percent, at 5,276.50 with British Airways PLC the top riser as its board weighed a merger deal with Spain's Iberia. Germany's DAX was down 4.39 points, or 0.1 percent, at 5,663.96, while France's CAC-40 rose 6.32 points, or 0.2 percent, to 3,808.07.

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MOSCOW _ President Dmitry Medvedev laid out his plan to move Russia's economy into the modern age and overcome the grim industrial legacy of the Soviet Union. In his annual state-of-the-nation address, he took a few digs at Vladimir Putin, his predecessor and mentor, but made clear that the tightly controlled political system Putin created is here to stay. Medvedev warned the opposition that any attempts to upset the current order will not be tolerated. He ordered a sweeping modernization of the Soviet-built military arsenals. But he also called for a "pragmatic" foreign policy aimed at attracting investment and improving living standards, rather than "chaotic actions driven by nostalgia and prejudice."

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SEOUL, South Korea _ South Korea's central bank left its key interest rate at a record low for the ninth straight month, pledging to maintain low borrowing rates to help extend a recovery in Asia's fourth-largest economy. The Bank of Korea decision to keep the benchmark seven-day repurchase rate at 2 percent came at a monthly policy meeting and was in line with expectations. The bank's monetary policy committee said in a statement that it will stick to its "accommodative policy stance for the time being with an emphasis on sustaining the recovery of economic activity." The wording was broadly similar to last month's statement. South Korea's economic recovery, a rise in housing prices and a decision last month by Australia's central bank to lift rates had created expectations the Bank of Korea might increase borrowing costs at its October meeting.

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DUBLIN _ Ireland's average prices fell 6.6 percent in the year to October, the sharpest rate since the Great Depression 78 years ago, as one of Europe's deepest recessions continues to take its toll, official data showed. The government Central Statistics Office said October's fall in prices was the steepest since Ireland's record annual price drop of 8.4 percent in the first quarter of 1931. Irish prices on average have been falling steadily this year, starting with a 0.1 percent annual drop in January and reaching 6.5 percent in September.

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LONDON _ Industrial production in the 16 countries that use the euro increased a modest 0.3 percent in September from the month before, reinforcing expectations that growth figures on Friday will show the recession in the single currency over. The increase reported by the EU's statistical office Eurostat was slightly below market expectations for a 0.5 percent increase but means that industrial production over the July to September period rose 2.2 percent. It was the fifth straight monthly rise. That helped trim the annual rate of decline to 12.9 percent from 15.1 percent.

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MADRID _ Spain remained in recession in the third quarter as its economy continued to shrink, although at a slower pace than earlier in the year, the government reported. Spanish gross domestic product fell 0.3 percent in the July-September period from the previous quarter, its fifth consecutive drop and technically keeping it in recession. In the first quarter, the economy shrank by 1.1 percent, the National Statistics Institute said in a preliminary report. Definitive figures will be released Nov. 18. The once-robust economy fell at an annual rate of 4.0 percent in the third quarter, compared with 4.2 percent in the second.

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SINGAPORE _ Brazil's economy, Latin America's largest, will likely grow about 9 percent in the fourth quarter as consumer demand surges and exports recover, a top trade official said. Exports, which will likely fall 22 percent this year, have shown signs of life recently, with a 20 percent increase in sales to the United States last month, Deputy Trade Minister Welber Barral told reporters on the sidelines of a yearly Latin American business conference in Singapore. Gross domestic product in the world's eighth largest economy is poised to expand 5 percent next year after growth between 1 percent and 1.5 percent this year, he said.

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TALLINN, Estonia _ Estonia's economy lost 15.3 percent of its value in the third quarter compared with a year ago, a slight improvement from the previous quarter as the recession stabilized somewhat, official data showed. The state's statistics agency said the fall was slower than the 16.1 percent annual drop in the second quarter. In the first quarter, the Baltic country's economy had contracted by 15 percent. Statistics Estonia said the economy was severely affected by shrinking domestic demand, contracting industrial production and sagging exports. But it stressed that wholesale and retail trade and the financial sector were the only areas where contraction deepened from the previous quarter.

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CANBERRA, Australia _ Australia's jobless rate rose to 5.8 percent in October despite the number of people employed rising by 24,500, the Australian Bureau of Statistics said. Economists had predicted the rise in the jobless rate, which comes after a surprise drop to 5.7 percent in September, but were far off in their forecast of a loss of 10,000 jobs. Total employment rose to 10.832 million in October, seasonally adjusted. The unemployment rate has steadily increased during 2008 and early 2009 from a low of 3.9 percent in February 2008, but stabilized since March this year, when it reached 5.7 percent.

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TOKYO _ Japanese stocks retreated as steep declines among pharmaceuticals and shipping companies wiped out initial momentum. The benchmark Nikkei 225 stock average fell 67.19 points, or 0.7 percent, to 9,804.49. The broader Topix index 0.5 percent to 867.70. The day started out in positive territory after an overnight rise on Wall Street and further signs of a global economic recovery. But sentiment fizzled in the afternoon on concerns about shares being diluted. Nippon Yusen K.K., Japan's biggest shipping line, said it plans to raise up to 142.49 billion yen by issuing new shares. The new shares would represent about 37 percent of its outstanding stock.