World stocks dive as pessimism mounts Print article Send a Tip from AP 26 Sep 2012 post a comment (AP) World stocks dive as growth pessimism mounts By KELVIN CHAN AP Business Writer HONG KONG Global stock markets dived Wednesday after pessimism about global growth prospects sparked Wall Street's worst sell-off in three months. Comments by a regional Fed official triggered the selling on Wall Street that spread around the world and added to a phalanx of other investor concerns. Crude oil dived and the euro weakened as investors fled to the safety of the dollar. In early European trading, France's CAC 40 dived 1.8 percent to 3,451.71 and Germany's DAX tumbled 1.4 percent to 7,323.02. The FTSE 100 index of leading British companies fell 0.9 percent to 5,807.13. U.S. stocks were poised to fall again. Dow futures were down 0.1 percent to 13,391.00 and broader S&P 500 futures fell 0.1 percent to 1,435.90. Charles Plosser, president of the U.S. Federal Reserve's Philadelphia branch, told an audience that the Fed's efforts to support the world's biggest economy would likely fall short of its goals. That soured sentiment and sent Wall Street lower Tuesday. Global stocks had risen earlier in the month as the Fed and other central banks came up with measures to boost sluggish growth. But optimism stemming from those moves has faded. Central banks had already bathed economies in massive stimulus through low interest rates and bond purchases but the world is still struggling to eke out growth, highlighting the limits of monetary policy. Japan's Nikkei 225 stock average closed down 2 percent at 8,906.70 and Hong Kong's Hang Seng dropped 0.8 percent to end at 20,527.73. South Korea's Kospi shed 0.6 percent to 1,980.44 and Australia's S&P/ASX 200 fell 0.3 percent to 4,361.60. China's Shanghai Composite Index shed 0.6 percent to 2,004.17. Benchmarks in Taiwan, Singapore, Indonesia, the Philippines, New Zealand and India also slid. Tension between China and Japan, which are the world's second and third-biggest economies, has also knocked sentiment because of the risk it will affect trade. Investors in Hong Kong and mainland China were also staying on the sidelines ahead of major holidays next week. Many wondered whether Chinese central bank authorities would policy changes during the holidays, as they often do. As mainland China prepares for an eight-day holiday next week, "investors are gloomy over the economic outlook, and are worried about slower economic growth together with higher inflation," said Peng Yunliang, a Shanghai-based analyst. In Tokyo, shares of export-reliant companies were sold on worries about the global economy and the continued strength of the yen. Masahiro Yamaguchi, a vice president at Mizuho Securities Co. in Tokyo, said auto and other export issues were getting hurt because of worries about a slowdown in China, as well as the possible negative impact on exports from a simmering territorial dispute with China over tiny islands. "It's about the China risk," he said. "The monetary policies are likely helping keep the drop in check, but they weren't enough to keep the rise going." In currencies, the euro fell to $1.2852 from $1.2898 in late trading Tuesday. The dollar fell to 77.62 yen from 77.70 yen. Benchmark crude was down 75 cents at $90.61 in electronic trading on the New York Mercantile Exchange. _________ Yuri Kageyama in Tokyo and researcher Fu Ting in Shanghai contributed to this report.