A look at economic developments around the globe

AP News
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Posted: Dec 22, 2009 12:56 PM

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

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LONDON _ European markets rose after strong housing data helped ease earlier concerns that the U.S. economic recovery was running out of steam. The gains were reined in though as more and more traders were closing out positions ahead of the Christmas break. In Europe, the FTSE 100 index of leading British shares closed up 34.67 points, or 0.7 percent, at 5,328.66 while Germany's DAX rose 15.16 points, or 0.3 percent, to 5,945.69. The CAC-40 in France was 26.32 points, or 0.7 percent, higher at 3,898.38. The buying momentum was sustained by the news that home resales in the U.S. surged to their highest level in nearly three years during November. The National Association of Realtors said sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million in November, from a downwardly revised pace of 6.09 million in October.

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BRASILIA, Brazil _ Brazilian officials are lowering their economic-growth predictions for 2009 but expect South America's largest economy to expand 5.8 percent next year. The Brazilian Central Bank says it expects the nation's GDP to grow 0.2 percent this year, down from its September prediction of 0.8 percent. Officials say Brazil's economy began recovering from the global crisis beginning in the second and third quarters of 2009. Incentives including tax-exemption programs for vehicles, construction materials and household appliances have helped speed up the recovery. The Central Bank said in its statement that inflation for 2010 could be higher than its current prediction of 4.5 percent. Inflation in 2009 is estimated at 4.3 percent.

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FRANKFURT _ A new survey showed that consumer confidence in Germany, Europe's biggest economy, continued to decline amid fears of job losses. The survey from the GfK research group found a third consecutive monthly slip in consumer confidence in the country, even though German business confidence has been rising for months. The Nuremberg-based group's forward-looking consumer climate index for January stood at 3.3 points _ down from a revised 3.6 points in December and 4 points in November.

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LONDON _ The British economy shrank less than previously estimated in the third quarter but the improvement fell short of economists' expectations, casting a shadow of doubt over the country's sluggish recovery. But there were also some positive signs in the data release from the Office for National Statistics, which revealed that gross domestic product contracted 0.2 percent in the July to September quarter. It was the third and final revision of the third quarter data _ improving on earlier estimates that had put the contraction first at 0.4 percent, then 0.3 percent.

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ATHENS, Greece _ Moody's Investors Service downgraded Greece's credit rating, despite efforts by the new Socialist government to slash public spending and pull the country out of an economic crisis. The government responded with a promise to redouble its cost-cutting efforts, while Greek investors responded with relief that the latest downgrade was not more severe. Moody's became the third rating agency to downgrade Greek government bonds _ changing them from an A1 category to A2. Standard and Poor's and Fitch have also downgraded their assessment of the country's ability to pay back debt. Greece is facing its worst debt crisis in decades and has come under intense European Union pressure to improve its public finances and comply with deficit limits intended to support the shared euro currency.

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SHANGHAI _ Chinese shares fell to a seven-week low, led by real estate stocks amid fears the government will take steps to slow other sectors of the economy after vowing to control rising property prices. The benchmark Shanghai Composite Index dropped by 72.45 points, or 2.3 percent, to close at 3,050.52, the lowest since Oct. 30. The Shenzhen Composite Index for China's smaller second exchange fell 2.7 percent to 1,109.37. A short-lived rally Monday fizzled amid concern about the direction of economic policy sparked by the government's announcement that it would take steps to slow a rise in housing prices, analysts said.

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BEIJING _ China expressed disappointment at a WTO ruling that it is illegally restricting imports of movies, music and books but gave no immediate sign whether it could keep trying to defend the controls. A World Trade Organization panel has upheld a ruling in a case brought by Washington that China was obstructing trade by forcing foreign suppliers to distribute movies, music and books through state-owned companies. The ruling allowed Beijing to continue reviewing products for objectionable content.

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DUBAI, United Arab Emirates _ Dubai's main stock market says it is buying another exchange run by Nasdaq in the struggling Arab boomtown in a deal it valued at $121 million. Dubai Financial Market said it is offering to buy the Nasdaq Dubai from the bourse's parent Nasdaq OMX Group to broaden its offerings to investors and further link the two exchanges. The deal follows a sharp drop in local markets after Dubai shocked investors with word it was seeking to restructure $26 billion in debts held by its main state-run conglomerate. Under the terms of the cash-and-stock deal, Nasdaq OMX will hold a 1 percent stake in the DFM and let Nasdaq Dubai continue to use its name and technology.

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BRUSSELS _ European Union nations voted to extend trade charges on Chinese and Vietnamese leather shoes by 15 months to protect European shoemakers _ a move likely to anger China and European retailers who say it inflates prices. China has complained about the antidumping duties, which it says are protectionist and damaging to free trade. European importers and retailers had also called for an end to the charges, saying they cost shoppers millions of euros. EU governments said in a short statement that they had voted by a majority to extend the duties. They did not say how the 27 member countries had voted.

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LUANDA, Angola _ OPEC held its output quotas unchanged, several ministers said as the producer group called for greater compliance from some members whose overproduction could undercut efforts to support prices amid a fragile global economic recovery. The announcement by delegates representing several of the Organization of the Petroleum Exporting Countries' members reflected the producer group's cautious approach to balancing the market this year _ at once dealing with weak demand and an oversupply while trying sustain the rebound in prices. In the end, the 12-member group decided that no action was the best action in a market where the pace of the world's recovery from its worst recession in decades remains uncertain.

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SINGAPORE _ Singapore said that it will start free trade negotiations with the European Union after talks between Southeast Asian countries and Europe stalled earlier this year. The EU and the 10-nation Association of Southeast Asian Nations, known as ASEAN, broke off two-year free trade talks in March because of slow progress, the Trade and Industry Ministry said. The EU is Singapore's biggest trading partner, accounting for $56 billion of sales, or about 12 percent of the city-state's total trade during the first 11 months of this year, the ministry said. In 2008, Singapore was the EU's 15th-largest trading partner.