LONDON, Dec 23 – World equities were mixed on Tuesday, with many investors away for the Christmas and year-end holidays, as dealers awaited key economic growth data in the United States.
"Markets continue the wind down for Christmas," said CMC Markets dealer Jimmy Yates.
In European early afternoon deals, London gained 0.60 percent, Paris added 0.23 percent and Frankfurt was up 0.29 percent.
But Asian markets fell as a smaller-than-expected Chinese interest rate cut failed to boost market sentiment, dealers said. Tokyo was closed for a public holiday.
London investors digested news that Britain\’s economy, hammered by the global financial crisis, shrank more sharply than previously thought in the third quarter, placing it closer to a recession.
The economy contracted by 0.6 percent in the three months to September compared with output in the previous quarter, the Office for National Statistics said in a statement giving the third and final estimates.
That was the steepest quarterly drop since 1990 and comes as Britain feels the chill from an accelerating global economic downturn.
Across the Atlantic, meanwhile, third-quarter gross domestic product numbers were also to be released in the United States later on Tuesday.
"As the year draws to an end, everyone is prepared to sit on their hands, do very little and prepare for what will hopefully be a better 2009, hoping that credit markets continue to stabilize and that the Obama administration stimulus plans drag the US back to life," said Calyon analyst Stuart Bennett.
Meanwhile, fears of sweeping job losses caused by the global economic crunch deepened with more layoffs, as governments took added measures to ease the impact of the crisis.
In Asia, the Hong Kong stock market shed 2.8 percent and Shanghai sank 4.55 percent.
China\’s central bank has unveiled its fifth interest rate cut since September, but it failed to stimulate investors concerned at the scale of the downturn being felt across the globe.
The People\’s Bank of China has meanwhile cut the benchmark one-year lending and deposit rates by 27 basis points, the fifth cut since mid-September.
"The interest rate cut had been widely anticipated, so when it turned out to be much smaller than expected, disappointed investors decided to take profits immediately," said Duan Junfang, an analyst from Heng Tai Securities.
South Korea announced measures aimed at shoring up its key shipbuilding and construction sectors, creating a task force to assess companies\’ finances and force the unviable ones to restructure.
Hynix Semiconductor, the world\’s second largest memory chipmaker, won an injection of nearly 600 million dollars from its creditors to help the South Korean group tackle falling demand and lower chip prices.
South Korea\’s woes saw Seoul lose three percent, Taipei shed 2.86 percent, and Sydney was down 0.7 percent.
Overnight, US stocks sank on concerns over corporate earnings, plunging retail sales and deteriorating US commercial property values in an economy reeling from recession. Wall Street reopens Tuesday at 1430 GMT.
US heavy equipment maker Caterpillar and Japan\’s Toyota both warned Monday that they expect economic troubles to intensify.
The jobs fears were crystallised by Angel Gurria, head of the Organisation for Economic Cooperation and Development in Paris, who said Monday that the global slowdown could put 25 million people out of work between now and 2010.
The German stock market will be closed on Wednesday, while London and Paris will shut at the half-way stage. All three markets will be closed on Thursday and Friday for Christmas.