World stocks mixed on proposed U.S. bailout

LONDON — European markets fell after Asian market finished higher Monday as talks continued on a proposed $700 billion U.S. plan to ease the world financial crisis by rescuing banks from billions of dollars in risky mortgage debt.

In Asia, Japan's Nikkei 225 index rose 1.42 percent, and Hong Kong's Hang Seng Index rose 1.58 percent. But in later trading in Europe, London's FTSE fell 1.41 percent, Germany's DAX declined 1.32 percent and France's CAC 40 fell 2.34 percent.

"There was massive reaction on Friday, today there is an element of profit-taking and a bit of reality of people worrying about the world economy as we see the price of oil move higher again," said Stephen Pope, chief global markets strategist for Cantor Fitzgerald.

"As the week develops there should be some concrete proposals coming through," he added.

The Group of Seven, an organization of the world's leading economic powers, pledged Monday to do all it could to help ease the crisis. The group said in a conference call that it welcomed the extraordinary steps the United States has taken so far. The group didn't offer specifics about what actions it might take. But it sought to send a reassuring message that they are on top of the situation.

But prices fell on Wall Street where investors grew nervous about the mortgage debt buyback plan. The Dow Jones industrials were down more than 250 points at midafternoon and investors sought safety in hard assets such as gold and oil, which at one point shot up more than $25 a barrel.

The Dow had risen about 780 points over two days to end last week as reports spread about the bailout proposal.

On Monday, the Nikkei 225 index climbed 1.4 percent to close at 12,090.59 points in Japan, while Hong Kong's Hang Seng Index rose 1.6 percent to 19,632.20.

In China, the Shanghai Composite Index soared 7.8 percent on hopes of a turnaround after government steps to stabilize the country's beaten down shares. Markets in Australia and Taiwan advanced strongly after their regulators issued curbs on short selling, following similar moves in the U.S., Britain and other countries. The practice, which bets on a stock's decline, has been partly blamed for driving down share prices.

Global markets had rallied Friday on news Washington was likely to enact a bailout plan, calming investors worried that losses from bad bets on mortgages could bring about the collapse of more companies, straining an already weakened financial system and global economy.