Global stocks sink on Fed rate hike expectations

Seoul, South Korea (AP) — Global stock markets fell Thursday after a strong U.S. job report boosted the case for the Federal Reserve to raise its interest rates next week for the first time in years.

Keeping score: Britain's FTSE 100 fell 1.2 percent to 6,155.31 and France's CAC 40 dropped 1 percent to 4,615.89, while Germany's DAX was down 0.8 percent to 10,226.19. Wall Street was expected to lack momentum on the open, with Dow and S&P futures both flat.

Fed watch: A report from the Labor Department on Wednesday showed that U.S. employers advertised the most jobs in the 15 years that the government has tracked the data. Job openings soared 8 percent to 5.75 million in July, adding to evidence that hiring remains strong and may prompt the Federal Reserve to raise interest rates at its meeting next week for the first time since the 2008 financial crisis. Ultra-low interest rates have been a boon for stock markets for several years, so the data caused losses on Wall Street.

Analyst's take: "Just when you thought risk sentiment is on the mend, it unceremoniously crumbles in the U.S. markets," said Bernard Aw, a market strategist at IG.

UK liftoff: The pound was somewhat volatile after minutes to the Bank of England's policy meeting on Thursday showed the rate-setters were worried about China's economic slowdown, but not enough to change their expectations for the British economy. Many analysts expect the first increase in interest rates early next year. After a jump higher, the pound fell back down to $1.5415

Asia's day: Asian markets shed some of the gains from the previous day's rally. Japan's Nikkei 225 sagged 2.5 percent to 18,299.62 one day after surging 7.7 percent in its biggest gain since October 2008. Hong Kong's Hang Seng index dropped 2.6 percent to 21,562.50 and China's Shanghai Composite Index finished 1.4 percent lower at 3,197.89. Stocks in Australia and Southeast Asia also were down but South Korea's Kospi turned up 1.4 percent to finish at 1,962.11. New Zealand stocks closed flat after the country's central bank cut its benchmark interest rate by a quarter of a percentage point.

Energy: Benchmark U.S. crude bounced back, adding 35 cents to $44.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.79 to close at $44.15 a barrel on Wednesday in New York.

Currencies: The U.S. dollar rose to 121.09 yen from 120.28 yen. The euro weakened to $1.1199 from $1.1219.

By Youkyung Lee, AP Business Writer. Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Gayly – September 10, 2015 @ 7:40am.