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World markets subdued as Wall Street rally loses momentum

SEOUL, Korea, Republic Of — Stock markets in Europe and Asia were subdued Tuesday as the afterglow from Wall Street's overnight rally faded. KEEPING SCORE: Germany's DAX shed 0.4 per cent to 12,239 and the CAC 40 of France fell 0.3 per cent to 5,122.
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SEOUL, Korea, Republic Of — Stock markets in Europe and Asia were subdued Tuesday as the afterglow from Wall Street's overnight rally faded.

KEEPING SCORE: Germany's DAX shed 0.4 per cent to 12,239 and the CAC 40 of France fell 0.3 per cent to 5,122. Britain's FTSE 100 was wobbling in and out of negative territory, edging 0.2 per cent higher to 7,191. S&P futures lost 0.6 per cent and Dow futures were 0.5 per cent lower, auguring a downbeat start for trading on Wall Street.

WHERE THINGS STAND: Sentiment is jittery after it took just nine days for stocks to plunge 10 per cent from their latest peak, which was reached on Jan. 26. A drop of that size is known on Wall Street as a market "correction." According to LPL Financial, it was the swiftest move from a record high to a correction in the history of the S&P 500. The index rose 1.5 per cent Friday but still wound up with its worst weekly loss in more than two years.

US INFLATION: A key question is whether the correction has already hit bottom, said Jingyi Pan, a market strategist at IG. "Nevertheless, the worst is likely not over for this week for the simple reason that we have U.S. CPI sitting as a mammoth event risk this week," said Pan, referring to the Wednesday release of U.S. consumer price index data for January. Concerns over inflation helped caused last week's market plunge, so the data will be watched closely.

ASIA'S DAY: Japan's Nikkei 225 lost 0.7 per cent to 21,244.68 after gaining more than 1.0 per cent earlier in the day. Hong Kong's Hang Seng index added 1.4 per cent to 29,884.06 and the Shanghai Composite Index advanced 1.0 per cent to 3,185.86. South Korea's Kospi rose 1.1 per cent to 2,395.19. Australia's S&P/ASX 200 rose 0.6 per cent to 5,855.90.

JAPAN OUTLOOK: Japan is due to release fourth quarter GDP data on Wednesday. The government looks likely to keep Bank of Japan Governor Haruhiko Kuroda on as central bank chief for another term. But the decision on the BOJ governorship comes at a time when concern is growing over the central bank's strategy for eventually winding down its massive monetary stimulus.

OIL: Benchmark U.S. crude fell 29 cents to $59.00 per barrel in electronic trading on the New York Mercantile Exchange. It gained 9 cents on Monday. Brent crude, used to price international oils, dropped 16 cents to $62.43 per barrel in London.

CURRENCIES: The dollar slipped to 107.55 yen from 108.66 yen. The euro rose to $1.2351 from $1.2289.

Youkyung Lee, The Associated Press