Markets slip after gloomy U.S. economic data report

LONDON -- World stock markets slipped Wednesday in limited Christmas Eve trade after downbeat data about the U.S. economy and housing sector and more gloomy news about Britain's real estate slump.

Britain's FTSE 100 index fell 1.1% to 4,210.10, while France's CAC-40 eased 0.73% to 3,105.71. Germany's stock market was closed.

House prices in Britain will fall 10% next year as banks rein in lending and buyers are deterred by the economic slowdown, a leading surveyors' group forecast Wednesday. The Royal Institution of Chartered Surveyors said the fall would bring house prices, which have roughly tripled over the last decade, down to at least 25% below their summer 2007 peak.

Britain's economy shrank 0.6% in the third quarter and economists expect a steep downturn from the global economic slowdown and consequences of the collapse in the house prices and sharply tighter credit.

In Asia, Japan's Nikkei 225 stock average dropped 206.68 points, or 2.4%, to 8,517.10, after being closed Tuesday for a holiday.

Shares in Toyota Motor Corp. tumbled 4% in their first trading day since Monday, when Japan's biggest automaker said it expected to post its first operating loss in almost 70 years this fiscal year. Wednesday's news that Toyota's global sales plunged almost 22% in November added to the sector's gloom, dragging down car companies around Asia.

Hong Kong's Hang Seng Index closed down 0.3% to 14,184.14, while South Korea's Kospi lost 1.4% 1,128.51. In Europe, Britain's FTSE traded 0.7% lower and Frances CAC 40 was off about 0.1% in shortened sessions.

"The end-of-the-year, bear-market, feel-good rally is ending sooner than many expected," said Kirby Daley, senior strategist at Newedge Group in Hong Kong.

"Investors are being hit in the face with the reality of just how bad the U.S. economy is and they're seeing firsthand the effects this is having on the consumer and, as a result, companies like Toyota and U.S. retailers," he said.

Elsewhere, Shanghai's benchmark lost 1.8% and India's main stock measure lost 1%; key indices in Australia, Taiwan and Singapore gained.