Worries about US rate hikes return to stalk markets

Global stock markets tracked Wall Street lower on Thursday after the minutes to the last meeting of the Federal Reserve policy meeting rekindled fears about the pace of interest rate rises.

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was down 1 percent at 7,210 while Germany's DAX fell 0.7 percent to 12,383. The CAC 40 in France was 0.3 percent lower at 5,283. U.S. stocks were poised for a modest recovery on the opening bell, with Dow futures and the broader S&P 500 futures pointing to gains of 0.3 percent.

MEETING MINUTES: The Fed minutes indicated confidence among policymakers about the outlook for U.S. and global economic growth, reinforcing expectations of further interest rate rises this year. Wall Street initially welcomed the report but soon U.S. Treasury yields spiked to their highest level in four years, snuffing out the stock market rally amid renewed worries about rising inflation. Higher yields generally hurt stock prices by making bonds more attractive than equities. Earlier this month, global stock markets, but particularly those in the U.S., suffered big losses amid mounting concerns over the pace of Fed policy tightening.

ANALYST TAKE: "Indices still appear vulnerable to further shocks and the prospect of more aggressive tightening by the Fed may trigger it," said Craig Erlam, senior market analyst at OANDA.

UK SLOWDOWN: British shares underperformed their European counterparts after figures showed the British economy did not grow as strongly as initially thought during 2017 as consumers and businesses were held back by factors related to Brexit. The Office for National Statistics said Thursday that the British economy expanded by a quarterly rate of 0.4 percent, down from the initial estimate of 0.5 percent. The downgrade was largely due to lower than anticipated industrial production.

ASIA'S DAY: Japan's benchmark Nikkei 225 index sank 1.1 percent to close at 21,736.44 and South Korea's Kospi shed 0.6 percent to 2,414.28. Hong Kong's Hang Seng lost 1.5 percent to 30,965.68 but the Shanghai Composite jumped 2.2 percent to 3,268.56, fueled by pent-up demand from investors in mainland China, where markets reopened after a weeklong holiday. Australia's S&P ASX 200 edged up 0.1 percent to 5,950.90. Taiwan's benchmark fell and Southeast Asian indexes were mostly lower.

ENERGY: Benchmark U.S. crude fell 15 cents to $61.52 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, lost 3 cents to $65.39 per barrel in London.

CURRENCIES: The euro fell 0.1 percent to $1.2276 while the dollar slid 0.6 percent to 107.07 yen.