In the UK the benchmark FTSE 100 Index has lost 0.9% to 5445.6 as stocks declined, paced by mining and energy companies including BHP Billiton and Royal Dutch Shell.
BHP, the world's biggest mining company, has dropped 32p, or 3.6%, to 860.5p. Shell, Europe's second-biggest oil company, has lost 21p, or 1.2%, to 1,813p in morning trading while BP, the largest oil company, has also declined 11.5p, or 1.8%, to 644p.
PartyGaming, the online-poker operator that sold $1.9bn of stock in a June initial public offering, lost 2.75p, or 2.9%, to 91p. Analysts have this morning advised investors to reduce holdings of the stock, and have cut their forecast for the share price by 43% to 100p.
British Airways has slipped 2.25p, or 0.8%, to 293.75p after Europe's third-largest airline released traffic figures for September this morning. The stock has been cut to "sell" from "hold" by analysts who say higher oil prices will hurt earnings.
Chesnara added 1.25p, or 0.7%, to 170.25p. The UK life-insurer has posted a first-half profit of £3.3m, helped by investment income. A year earlier the company's loss was £4.4m in the same period.
In Japan, the Nikkei 225 Stock Average lost 48.95 points, or 0.4%, to 13,689.89 at its close a short while ago, despite yesterday closing at its highest since May 2001. Stocks fell, as Mizuho Financial Group led banks lower.
Mizuho Financial, Japan's second-largest bank by assets, dropped 31,000 yen, or 4.2%, to 701,000. It was the most active stock by value on the first section, with 121 billion yen in shares changing hands.
The bank plans to sell 535 billion yen in shares to repay public funds and will offer 700,000 shares held by a subsidiary to investors in Japan and overseas, the lender said after the market closed today. The sale may be increased to 763,000 shares, or 6.4% of stock outstanding, to meet demand.
The drop in Mizuho shares was triggered after newspaper reports earlier in the day reported the share-sale plan, which would be Japan's largest in more than four years.
Other lenders also fell. Resona Holdings, which received a 1.96 trillion yen bailout, lost 6,000 yen, or 2.1%, to 283,000, and Sumitomo Mitsui Financial Group, the third largest, declined 37,000 yen, or 3.6%, to 993,000.
Aeon, Japan's second-largest retailer, jumped 115 yen, or 4.9%, to 2,465. Other retailers also rose including Seiyu, whose largest shareholder is Wal-Mart Stores, advanced 15 yen, or 6%, to 267. United Arrows, a clothes retailer, gained 240 yen, or 4.5%, to 5,540 after saying September same-store sales rose 6.1% from the same month a year earlier.
Beef related stocks also improved at the prospect of Japan ending a two-year ban on US and Canadian beef imports by the end of the year.
Yoshinoya D&C, whose main dish was bowls of rice topped with beef until Japan's ban of US imports of the meat in 2003, surged by the daily exchange-imposed limit of 30,000 yen, or 18%, to 201,000. Starzen, which sells imported meat, jumped 62 yen, or 19%, to 396, the biggest gainer on the first section, followed by Yoshinoya.
In the US, the Dow Jones Industrial Average dropped 94.37 points, or 0.9%, to 10,441.11 at its close. Stocks fell on evidence that higher energy costs are hurting profits at companies such as Procter & Gamble and Clorox.
Procter & Gamble, the largest US household goods maker, fell $1.23, to $58.08 as higher prices for raw materials may limit the company's ability to exceed earnings estimates.
Clorox dropped $0.77, to $53.81. The biggest US manufacturer of household bleach cut its forecast for the fiscal year 2006 and said it will raise prices on almost half its products because of higher energy costs.
Exxon Mobil fell $1.94, or 3.1%, to $60.55, for the worst performance in the Dow average. Energy shares as a group slumped 3.4% as crude oil prices fell. Chevron declined $1.61, to $62.84.
Mylan Laboratories gained $1.02, to $20.40. The drugmaker won regulatory approval from the Food and Drug Administration for a generic version of Pfizer's blood-pressure pill Norvasc. Pfizer, the world's biggest drugmaker, slipped $0.05 cents, to $25.24.
Comments by Federal Reserve Bank of Dallas President Richard W. Fisher, who said inflation is near the upper limit of a tolerable range, contributed to the slide by heightening concern that the central bank will keep raising interest rates. Stocks retreated in the afternoon after Fisher spoke about inflation, and extended their declines in the last 90 minutes of trading.IFAonline
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation