World stocks struggle amid Iraq woes, drop in European data offsets more upbeat China report

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The Associated Press

LONDON (AP) — Global stock markets mostly fell on Monday amid concerns about turmoil in Iraq and as a weak European economic report offset a more upbeat one in China.

Investors were watching with unease the escalating violence in Iraq, where militants over the weekend captured a chunk of new territory in the country's west. Some worry that the violence could further destabilize the region and possibly affect the flow of energy exports.

In Europe, sentiment was dented further by a report suggesting the 18-country eurozone's economy slowed in June. The so-called composite purchasing managers' index — a key gauge of business activity — dropped to 52.8 points from 53.5 in May. That indicates growth continued in the second quarter, but at only a modest pace.

Earlier, a similar report in China by HSBC was somewhat more upbeat. It showed activity in China's huge manufacturing sector expanded for the first time this year, a sign that the effects of recent mini-stimulus measures unleashed by Beijing were filtering through the economy.

By late afternoon in Europe, Germany's DAX was down 0.4 percent to 9,947.21 while France's CAC 40 shed 0.4 percent to 4,525.51. The FTSE 100 index of leading British companies slipped 0.3 percent to 6,802.32.

In the U.S., the Dow shed 0.2 percent to 16,917.37 while broader S&P 500 was roughly unchanged at 1,962.19.

In Asia, Australia's benchmark S&P/ASX 200 index rose 0.6 percent to close at 5,453.30 and the country's currency strengthened after the Chinese data. Investors are hoping an improving Chinese economy will benefit big mining companies in Australia, where the resource-driven economy has become highly dependent on China's demand for commodities such as iron ore.

Japan's Nikkei 225 edged 0.1 percent higher to close at 15,369.28, while South Korea's Kospi rose 0.4 percent to end at 1,974.92.

Hong Kong's Hang Seng tumbled 1.7 percent while the Shanghai Composite Index in mainland China dipped by 0.1 percent.

In energy trading, the price of U.S. benchmark crude for August delivery fell 41 cents to $106.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 78 cents on Friday.

In currencies, the dollar slipped to 101.89 Japanese yen from 102.08 in late trading Friday. The euro weakened to $1.3595 from 1.3599.

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