Global stocks, Wall Street down after US economy shrinks

A currency trader walks by the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Thursday, June 30, 2022. Asian stock markets were mixed Thursday after the U.S. economy contracted and China reported stronger factory activity.(AP Photo/Lee Jin-man)

A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, June 30, 2022. Asian stock markets were mixed Thursday after the U.S. economy contracted and China reported stronger factory activity. (AP Photo/Lee Jin-man)

A currency trader talks on the phone near the screens showing the foreign exchange rates at a foreign exchange dealing room in Seoul, South Korea, Thursday, June 30, 2022. Asian stock markets were mixed Thursday after the U.S. economy contracted and China reported stronger factory activity.(AP Photo/Lee Jin-man)

Currency traders watch computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rates at a foreign exchange dealing room in Seoul, South Korea, Thursday, June 30, 2022. Asian stock markets were mixed Thursday after the U.S. economy contracted and China reported stronger factory activity. (AP Photo/Lee Jin-man)

A currency trader stands near the screens showing the foreign exchange rates at a foreign exchange dealing room in Seoul, South Korea, Thursday, June 30, 2022. Asian stock markets were mixed Thursday after the U.S. economy contracted and China reported stronger factory activity.(AP Photo/Lee Jin-man)

The New York Stock Exchange on Wednesday, June 29, 2022 in New York. Stocks shifted between gains and losses on Wall Street Wednesday, keeping the market on track for its fourth monthly loss this year. (AP Photo/Julia Nikhinson)

The American flag is shown at the New York Stock Exchange on Wednesday, June 29, 2022 in New York. Stocks shifted between gains and losses on Wall Street Wednesday, keeping the market on track for its fourth monthly loss this year. (AP Photo/Julia Nikhinson)

People walk past the New York Stock Exchange on Wednesday, June 29, 2022 in New York. Stocks shifted between gains and losses on Wall Street Wednesday, keeping the market on track for its fourth monthly loss this year. (AP Photo/Julia Nikhinson)

BEIJING (AP) — Global stock markets declined Thursday after the U.S. economy contracted, fueling fears of a worldwide downturn.

London and Frankfurt opened lower. Tokyo and Hong Kong declined while Shanghai gained.

The future for Wall Street’s benchmark S&P 500 index was down 1.1% after data Wednesday showed the U.S. economy shrank in the first quarter amid high inflation and weakening consumer confidence.

Investors are uneasy about signs the biggest global economy might be in a recession due to interest rate hikes imposed to cool surging inflation.

“Equities demand could remain muted for at least the next four to six months as interest rate hikes work through the U.S. economy,” Stephen Innes of SPI Asset Management said in a report.

In early trading, the FTSE 100 in London fell 1.5% to 7,202.53. The DAX in Frankfurt lost 2% to 12,746.35 and the CAC 40 in Paris shed 1.9% to 5,917.07.

On Wall Street, the future for the Dow Jones Industrial Average was off 0.9%.

On Wednesday, the S&P 500 slipped 0.1% after official data showed economic activity contracted 1.6% at an annualized rate in the three months ending in March. That was the first contraction since the second quarter of 2020 in the depths of the pandemic.

The U.S. benchmark is down 7.6% for the month and 20% from its Jan. 3 peak.

The Dow rose 0.3% while the Nasdaq composite slipped less than 0.1%.

In Asia, the Shanghai Composite Index rose 1.1% to 3,398.62 after an official monthly gauge of factory activity rose and new orders improved. The Hang Seng in Hong Kong lost 0.5% to 21,899.57 after spending much of the day in positive territory.

The Nikkei 225 in Tokyo fell 1.5% to 26,393.04 after May industrial production slumped 7.2% compared with the previous month. That was the sharpest decline since the start of the coronavirus pandemic in early 2020 and reflected disruptions in China due to the anti-virus controls.

The Kospi in Seoul shed 1.6% to 2,339.70 after official data showed industrial production rose 0.1% in May, possibly also depressed by disruption caused by anti-disease measures that temporarily shut down Shanghai and other Chinese industrial centers.

Sydney's S&P-ASX 200 declined 2% to 6,568.10 while India's Sensex gained 0.3% to 53,208.84. New Zealand, Singapore and Bangkok advanced while Jakarta declined.

Federal Reserve Chair Jerome Powell, speaking at a European Central Bank meeting in Portugal, said Wednesday there is “no guarantee” inflation can be tamed without hurting the job market.

The global economy also has been roiled by Russia's invasion of Ukraine, which pushed up prices of oil, wheat and other commodities.

A monthly purchasing managers' index released Thursday by the Chinese statistics agency and an industry group rose to 50.2 in June from 49.6 on a 100-point scale on which numbers above 50 indicate activity is increasing.

In energy markets, benchmark U.S. crude lost 3 cents to $109.75 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 on Wednesday to $109.78. Brent crude, the price basis for international oil trading, added 6 cents to $112.51 per barrel in London. It shed $1.72 the previous session to $116.26. per barrel.

The dollar declined to 136.23 yen from Wednesday's 136.54 yen. The euro fell to $1.0447 from $1.0523.