European markets down early as major Asia markets pause for autumn festivals

BANGKOK (AP) — European indexes were down in early trading Thursday while major stock markets in Asia were closed in observance of mid-autumn festivals as investors absorbed an announcement by the Federal Reserve that it is ready to take more action to help the ailing U.S. economy.

Oil prices hovered below $75 a barrel in Asia as rising crude inventories in the U.S. suggest demand remains weak. In Europe, London's FTSE 100 index was slightly down 0.1 percent to 5,5089.39; Germany's DAX was down 0.3 percent to 6,186.50 and France's CAC-40 was down 0.1 percent to 3,716.97. Wall Street looked set to open lower with Dow Jones futures down 0.1 percent to 10,621.

Among markets open in Asia, Australia's benchmark stock index closed up 0.2 percent to 4,633.6. Key indices in Thailand and the Philippines posted gains, while those in New Zealand, India and Malaysia declined.

Markets in Japan, mainland China, Hong Kong and South Korea were closed for holidays.

The pause comes a day after most Asian benchmarks ended in negative territory. Japan, whose Nikkei 225 stock average was closed for Autumnal Equinox Day, closed down 0.4 percent at 9,566.32 Wednesday as the yen strengthened, with exporters, such as Toyota Corp. and Canon Inc. losing ground in particular.

In Sydney, shares of mining giant BHP Billiton were up 32 cents, or 0.82 percent, to AU$39.22 in afternoon trading. The rise comes despite an announcement Wednesday that Canada's Potash Corp. of Saskatchewan had asked a U.S. court to block a $39 billion hostile takeover by BHP on the grounds BHP has made "false statements and half-truths." BHP launched a hostile $130-per-share takeover bid last month after Potash directors rejected its offer as inadequate.

Malaysia's bourse was lower Thursday with blue chips tumbling sharply amid a consolidation after the market hit a two-and-a-half year high earlier this week. Some construction stocks however, bucked the trend on expectations of gains from proposed infrastructure project in a 10-year economic blueprint unveiled Tuesday.

In New York on Wednesday, the Dow Jones industrial average fell as traders booked profits and then moved into Treasurys and gold. Major U.S. indexes soared in September — the Dow has risen 7.5 percent — as economic reports have consistently indicated the economy continues to grow, albeit slowly.

The Fed didn't announce specific actions to strengthen the economy, but investors interpreted its statement as a signal that the central bank could step up its bond-purchasing program down the line. Investors had little incentive to move more money into stocks, so they turned their focus to bonds and gold.

"The Fed is edging towards further stimulus. Barring material improvements in the outlook, we would anticipate action as early as the November meeting," Citi Investment Research said in a report. Citi also said it anticipates "sustained but uneven global growth" with modest recoveries in the U.S. and Europe.

The Fed is not alone in contemplating new monetary measures to boost the world's No. 1 economy. The Bank of England is also seemingly paving the way for further action to support economic growth in Britain.

In currencies, the dollar strengthened slightly against the yen, to 84.55 from 84.52 on Wednesday, while the euro dropped to $1.3370 from $1.3390 in New York late Wednesday.

Benchmark crude for November delivery was down 5 cents to $74.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 26 cents to settle at $74.71 on Wednesday.


Associated Press writer Alex Kennedy in Singapore contributed to this report.

(This version CORRECTS Corrects typo in headline. New approach, adds analyst comment on Fed action, market openings in Europe, Wall Street futures. Updates prices. This story is part of AP's general news and financial services.)