World stocks slide after IMF trims economic outlook

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An investor walks in front of private stock trading boards at a private stock market gallery in Kuala Lumpur, Malaysia, Tuesday, Oct. 9, 2018. Asian markets are mixed after the IMF downgraded its economic outlook, citing rising interest rates and mounting tensions over trade. (AP Photo/Yam G-Jun)

Global stock markets fell Tuesday after the International Monetary Fund lowered its outlook for the world economy, citing the impact of rising interest rates and trade tensions.

KEEPING SCORE: Germany's DAX lost 0.5 percent to 11,891 while the CAC 40 in France shed 0.3 percent 5283. Britain's FTSE 100 dropped 0.4 percent to 7,201. Wall Street was set for a drop. Dow futures lost 0.5 percent and the S&P 500 futures were down 0.6 percent.

ASIA'S DAY: Japan's benchmark Nikkei 225 fell 1.3 percent to 23,469.39. Hong Kong's Hang Seng fell 0.1 percent to 26,172.91. The Shanghai Composite index recovered its losses by 0.2 percent to 2,721.01, after tumbling 3.7 percent on Monday. Australia's S&P/ASX 200 gave up 1.0 percent to 6,041.10. Stocks rose in Taiwan, Thailand and Indonesia but fell in Singapore. Markets in South Korea were closed for a national holiday.

IMF DOWNGRADE: The International Monetary Fund has revised its outlook for the global economy, citing rising interest rates and growing tensions over trade. It said the global economy will grow 3.7 percent this year, the same as in 2017 but down from the 3.9 percent it was forecasting for 2018 in July. The report comes on the eve of the Oct. 12-14 meetings in Bali, Indonesia, of the IMF and its sister lending organization, the World Bank. IMF believes that the Chinese economy will grow by 6.6 percent this year as previously forecasted. But the fund lowered China's economic outlook for 2019 to 6.2 percent, which would be the country's slowest growth since 1990.

U.S.-CHINA TALKS: On Monday, U.S. Secretary of State Mike Pompeo said Washington had a "fundamental disagreement" and "great concerns" about Chinese actions, before a meeting with Chinese Foreign Minister Wang Yi and another senior official in Beijing on Monday. The Trump administration has confronted China on its technology policies and territorial claims in the South China Sea, and the countries have raised tariffs on tens of billions of dollars of each other's goods.

ANALYST'S TAKE: The IMF report "should in no way surprise" as the fund's managing director Christine Lagarde warned that trade disputes were weighing on global growth last week, said Chris Weston of Pepperstone Group Limited. "However, this is the first time any recognized body has been prepared to officially recognize the trade tensions and mark down their forecasts and that is a message in itself," he added.

ENERGY: Benchmark U.S. crude added 45 cents to $74.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 0.1 percent to settle at $74.29 per barrel in New York. Brent crude, used to price international oils, rose 70 cents to $84.61 per barrel. It dropped 0.3 percent to $83.91 per barrel in London.

CURRENCIES: The dollar was steady at 113.21 yen, while the euro fell to $1.1437 from $1.1489 the day before.