World News

Asian, European Stocks Plunge on Weak Chinese Factory Data

Stocks in Asia and Europe plunged Thursday after a report unexpectedly showed Chinese manufacturing is shrinking.

Japan's Nikkei stock index tumbled 7.3 percent after release of the report showing Chinese factory production dropped in May for the first time in seven months. It was the biggest one-day loss since Japan's March 2011 tsunami and nuclear disaster.

Stocks in London, Paris and Frankfurt followed suit, closing down more than two percent. U.S. markets were off slightly in early afternoon trading.

Economic growth in China, the world's second-largest economy, remains ahead of the government's 7.5 percent target for 2013. But its 7.8 percent growth last year was the slowest in 13 years.



The drop in the Nikkei index - 1,143 points - was its 11th largest ever.

Markets fared little better elsewhere in Asia. Sydney closed down nearly two percent. South Korean shares fell 1.2 percent. Shanghai and Hong Kong also were down.

Investors also may have been affected by a statement Wednesday from U.S. Federal Reserve chief Ben Bernanke that the central bank could scale back on its massive stimulus measures if the U.S. economy improves over the coming months.

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