Stocks in Europe, Asia Retreat

Stocks in Europe and Asia fell as Japan’s economy contracted the most since 1974, Britain was warned it faces the worst recession in almost three decades and the Group of Seven offered no solution to revive global growth., Bloomberg 2/16/2009 6:31:28 AM

Legal & General Group Plc dropped almost 6 percent on speculation the insurer is in talks with the Financial Services Authority over the amount of money it should set aside for defaults in its bond portfolio. Takefuji Corp. slid 9.5 percent after Japan’s third-biggest consumer lender forecast a full-year loss and the country’s gross domestic product contracted at an annual 12.7 percent pace. CRH Plc fell 5.2 percent in Dublin on concern the company may be considering a rights offer.

The MSCI World Index declined 0.6 percent to 831.78 at 12:42 a.m. in London, extending its 2009 retreat to 9.6 percent. The gauge of 23 developed markets has dropped for five days as companies from Electricite de France SA to Diageo Plc posted disappointing results and U.S. Treasury Secretary Timothy Geithner failed to convince investors his bank rescue will work.

Futures on the Standard & Poor’s 500 Index slipped 0.5 percent. U.S. markets will be closed today for Presidents’ Day.

Europe’s Dow Jones Stoxx 600 Index fell for the fourth time in five days, losing 0.7 percent. The MSCI Asia-Pacific Index declined 0.5 percent as washing-machine maker Fisher & Paykel Appliances Holdings Ltd. said it doesn’t expect a profit this fiscal year.

The G-7’s finance ministers and central bankers said in a statement released after talks in Rome that they were working to restore confidence in markets and revive the world economy. They predicted the full effect of individual rescue packages will build over time” and a severe” economic downturn will persist for most of 2009.

The Japanese economy contracted the most since the 1974 oil shock, according to figures from the Cabinet Office, with gross domestic product falling for a third straight quarter.

The U.K.’s GDP will contract 3.3 percent this year, instead of the 1.7 percent predicted in November, the Confederation of British Industry said. By the end of 2009, the economy will have contracted for six consecutive quarters, the business lobby said.