World Shares Down on US Rate Concerns

KUALA LUMPUR, Malaysia (AP) -- World shares fell Wednesday amid concerns that higher-than-expected U.S. inflation could trigger rate hikes. Shares in Tokyo ceded initial gains from better-than-expected GDP data, and China markets succumbed to a fresh bout of pessimism.

KEEPING SCORE: France's CAC 40 shed 0.4 percent to 4,281.48 and Germany's DAX also eased 0.2 percent to 9,874.26. Britain's FTSE 100 lost 0.5 percent to 6,136.94. Dow and S&P 500 futures both were down 0.1 percent.

ANALYST VIEWPOINT: "U.S. investor nerves were triggered by a stronger than expected read on headline CPI for April. The question of whether underlying US inflation surprises to the upside this year is near the top of the list for major market issues at the moment. If it does, U.S. rate hikes could be in prospect," Ric Spooner, chief market analyst for CMC Markets, said in a research note.

JAPAN'S SURPRISE: Annual growth in the first quarter of the year was a faster-than-expected 1.7 percent, the government reported. Solid consumer demand and higher government spending helped offset weak business investment and sluggish exports.

CHINA GLOOM: Recent data have come in weaker than hoped, underscoring the fragility of China's economy. Meanwhile, investors appeared disappointed by a lack of fresh market-boosting initiatives from Beijing during a visit by a top Communist Party official, Zhang Dejiang, to Hong Kong.

ASIA'S DAY: Japan's Nikkei 225 stock index shed 0.1 percent to 16,644.69. The Shanghai Composite index dropped 1.3 percent to 2,807.51 and Hong Kong's Hang Seng lost 1.5 percent to 19,826.41. South Korea's Kospi lost 0.6 percent to 1,956.73 but Jakarta, Kuala Lumpur and Taiwan were slightly up. Australia's S&P/ASX 200 fell 0.7 percent to 5,356.20.

ENERGY: U.S. crude oil fell 24 cents to $48.07 a barrel in electronic trading on the New York Mercantile Exchange. It rose 59 cents to $48.31 a barrel in New York. Brent crude, used to price international oils, lost 28 cents to $48.99. It rose 31 cents to $49.28 a barrel in London.

CURRENCIES: The dollar rose to 109.47 yen from 109.14 yen. The euro slipped to $1.1258 from $1.1314.