EU Stocks Sink on Middle East Worries

HONG KONG (AP) -- European stock markets opened sharply lower Tuesday as jitters about instability in the Middle East intensified while Asian stock markets dithered as slumping commodity prices weighed on shares of resource companies.

KEEPING SCORE: European stocks sank in early trading after a Russian warplane was shot down by Turkey. France's CAC 40 lost 1.6 percent to 4,811.56 and Germany's DAX slid 1.1 percent to 10,965.39. Britain's FTSE 100 dropped 1 percent to 6,244.43. U.S. stocks were poised to open lower. Dow futures were down 0.5 percent to 17,674.00 and broader S&P 500 futures fell 0.5 percent to 2,072.90.

INSTABILITY RISK: Turkey shot down a Russian warplane that it said had violated Turkish airspace and ignored repeated warnings, ratcheting up geopolitical tensions and sending investors scrambling out of stocks in search of safe havens. Russia denied the plane crossed Syria's border into Turkey. Russia's defense ministry says the pilots parachuted but there has been no contact with them.

COMMODITY CRUNCH: Raw materials such as copper and nickel have slid to multi-year lows on the subdued global economic outlook as well as the dollar's strength on rising expectations that the Federal Reserve will raise interest rates next month. That's dragging down commodity producers such as Australian miners BHP Billiton and Rio Tinto. Demand for commodities from international buyers is affected by the strength of the greenback because contracts are priced in dollars.

FED FOCUS: Most investors expect the Federal Reserve to raise interest rates from a record low at its mid-December meeting and markets are likely to trade within a narrow range unless signs emerge that the U.S. central bank will change course. That contrasts with monetary policy from other major central banks in Japan and Europe, which are expected to keep the stimulus taps open.

QUOTABLE: "There is no denying we are moving into the eye of the storm, with the market having merged into one giant consensus trade. That trade is of course long U.S. dollar, short commodities and U.S. Treasurys," said market strategist Chris Weston of IG in Sydney. "There simply haven't been any buyers and commodity futures have been easy to push lower."

ASIAN SCORECARD: Japan's Nikkei 225 index recovered from early losses to finish 0.2 percent higher at 19,924.89 after reopening following a public holiday. South Korea's Kospi climbed 0.6 percent to 2,016.29. Hong Kong's Hang Seng lost 0.4 percent to 22,587.63 and the Shanghai Composite Index in mainland China fell 0.2 percent to 3,616.11. Australia's S&P/ASX 200 shed 1 percent to 5,226.40. Benchmarks rose in Singapore and Indonesia but fell in Taiwan, India, Thailand and the Philippines.

ENERGY: The benchmark U.S. crude futures contract was up 71 cents to $42.46 a barrel on the New York Mercantile Exchange. The contract fell 15 cents, or 0.4 percent, to close at $41.75 in New York on Monday. Brent crude, which is used to set prices for international oils, rose 68 cents to $45.51 a barrel in London.

CURRENCIES: The dollar slipped to 122.57 yen from 122.92 yen in the previous day's trading. The euro rose to $1.0653 from $1.0636.

(KA)