A look at economic developments around the globe

AP News
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Posted: Oct 18, 2010 2:55 PM
A look at economic developments around the globe

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

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SHANGHAI _ Rapid flows of capital toward Asia require swift action and cooperation to ensure stability, the head of the International Monetary Fund said, following a conference with central bankers focused on nurturing the global recovery.

The IMF's managing director, Dominique Strauss-Kahn, noted that while the capital flooding into fast-growing China and other Asian countries can spur growth, it could also fuel excessive lending, asset price bubbles and financial instability, according to a text of a speech provided by the IMF.

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LUXEMBOURG _ Yielding to French pressure, Germany softened its stance on stricter eurozone budget rules, officials said, angering governments that counted on Berlin to force through sanctions for nations living beyond their means.

Ahead of a two-day meeting of EU finance ministers, Germany was an ardent proponent of a proposal by the European Commission, the EU's executive, to impose near-automatic sanctions on nations that breach the bloc's deficit and debt levels.

But at the meeting, Berlin softened its stance under pressure from France and others reluctant to transfer too much power to unelected Brussels bureaucrats.

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PARIS _ French oil workers defied the government's demand to get back to work and end scattered fuel shortages, stepping up their fight against President Nicolas Sarkozy's plan to raise the retirement age to 62.

Strikers have blockaded a dozen French refineries and numerous oil depots in the last week as part of widespread protests over Sarkozy's plan to raise the retirement age to 62, a reform the French Senate is voting on Wednesday.

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LONDON _ In Europe, the FTSE 100 index of leading British shares closed up 0.7 percent, Germany's DAX rose 0.4 percent while the CAC-40 in France ended 0.2 percent higher.

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TOKYO _ Japan's Nikkei 225 stock average ended nearly flat.

Chinese shares fell on massive profit-taking, as caution set in after seven straight days of gains. The benchmark Shanghai Composite Index lost 0.5 percent.

Hong Kong's Hang Seng dropped 1.2 percent. Banking heavyweight HSBC was down more than 2 percent, weighed down by U.S. financial stocks that have been affected by mortgage problems that could cost big banks billions.

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MILAN _ The luxury sector is rebounding better than expected this year thanks in large part to wealthy Americans replenishing their wardrobes after a year of self-denial and nouveau riche Chinese indulging in a worldwide spending spree, according to a new study.

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MADRID _ Spain's governing Socialist party said it has secured passage of its austere budget for 2011 following deals with two regional parties.

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BUDAPEST, Hungary _ Hungarian lawmakers are expected to approve a series of "crisis taxes" aimed at ensuring the government can meet its targets for reducing the budget deficit.