World Stocks Drift Lower; China Plunges

(AP) -

World stock markets mostly drifted lower Friday ahead of Greece’s weekend referendum, while China’s main stock benchmark plunged as government efforts failed to reassure panicky investors.

European stocks were mixed, with France’s CAC 40 falling 0.6 percent to close at 4,808.22. Germany’s DAX dropped 0.4 percent to 11,058.39. Britain’s FTSE 100 declined 0.7 percent to 6,585.78. U.S. markets were closed in observance of Independence Day.

A Chinese market rout deepened as investors dumped shares in spite of government measures this week aimed at restoring confidence, such as cutting fees and easing rules on borrowing money for trading. The China Securities Regulatory Commission, the market watchdog, said late Thursday that it’s launching an investigation into suspected stock market manipulation, state media reported, an indication that the government is trying to halt the market slide.

“Policies take time to work their way through the system before sentiments can be more permanently altered,” Bernard Aw of IG Markets in Singapore wrote in a commentary. “For now, the mood is verging on panic.”

The Shanghai Composite Index ended down 5.8 percent at 3,686.92. The index has plunged 29 percent since hitting a peak of 5,166.35 June 12. Hong Kong’s Hang Seng fell 0.8 percent to close at 26,064.11, while Japan’s Nikkei 225 edged up 0.1 percent to 20,539.79. South Korea’s Kospi slipped 0.1 percent to 2,104.41 and Australia’s S&P/ASX 200 retreated 1.1 percent to 5,538.30.

Benchmark U.S. crude fell $1.41 to $55.52 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.75 to $60.32 a barrel in London.