TOKYO -- World stock markets slid Monday, dragged down by global economic angst after an unexpectedly weak U.S. jobs report and surging inflation in China.
Wall Street's sharp drop before the weekend extended to Asia and Europe, where investors digested news that U.S. employers created the fewest number of jobs in nine months. The 18,000 net jobs in created in June were a fraction of what many economists expected and dampened hopes that the economy is improving.
"Economic news in the U.S. was disappointing," said a Barclays Capital report Monday. "The employment report was weaker than expected across the board -- employment, unemployment, hours, and wages all reflected the same worrisome trend."
As trading got under way in Europe, France's CAC 40 was off 1.3% at 3,861.08 and Britain's FTSE 100 dropped 0.2% to 5,976.79. Germany's DAX shed 0.9% to 7,337.62.Wall Street was also set for losses with Dow futures down 0.7% at 12,529. In Asia, Japan's Nikkei 225 stock average lost 0.7% to 10,069.53 and Hong Kong's Hang Seng retreated 1.7% to 22,347.23. South Korea's Kospi fell 1.1% to 2,157.16 while the Shanghai Composite index edged up 0.2% to 2,802.69. Also dragging sentiment was data released Saturday showing China's inflation accelerated to a three-year high in June even as the overheated economy began to cool. Consumer prices rose 6.4% over a year ago, a sharp jump from May's 5.5% rate, China's government said Saturday. Communist leaders declared taming prices their priority this year, but they have been frustrated amid inflation's steady rise. In Australia, the government's new carbon tax proposal battered stocks. The S&P/ASX 200 shed 1.6% to 4,582.30. Prime Minister Julia Gillard unveiled a plan Sunday to force the country's 500 worst polluters to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit. Australia's flagship carrier Qantas said Monday the tax will cost it 110 million to 115 million Australian dollars ($118 million to $123 million) for the 2013 financial year and lead to an increase in passenger fares. Qantas Airways shares tumbled 3.3%, and Virgin Blue Australia fell 2.9%.