Stocks resume decline, bond yields ease

A tentative rebound in global stocks spluttered on Wednesday while euro zone government bond yields hit a three-year low as gloomy economic news highlighted the case for more aggressive interest rate cuts in Europe this week.
The euro stayed on the backfoot and oil held near a 3-1/2 year low a day before the European Central Bank, Bank of England and Sweden's Riksbank are all widely expected to cut borrowing costs.
Supporting those expectations, economic reports on Wednesday showed the euro zone's services economy fell deeper into recession in November than initially thought and inflationary pressures eased.
"This is a horrible survey across the board, showing that the euro zone service sector is being hit ever harder by the financial crisis, muted consumer spending and markedly weaker activity in key export markets," said Howard Archer, economist at IHS Global Insight.
Australia's economy grew at its slowest pace in eight years in the third quarter as gathering recession abroad and evaporating equity wealth at home curbed spending by consumers and businesses.
Central banks worldwide are cutting rates to fight recession. They are also considering more measures to stabilise financial markets and restore battered consumer and investor confidence, including help for struggling U.S. auto makers.
The FTSEurofirst 300 index of top European shares fell 1.5 percent in early trade with Britain's FTSE 100 index down 0.9 percent and Germany's DAX shedding 1.7 percent.
MSCI world equity index eased 0.4 percent.
"The markets are still looking very tender," said Justin Urquhart Stewart, investment director at Seven Investment Management.
"Markets are not focusing on any of the good news and the good news is rates are being cut, commodity pries are coming down, stimulus packages are being put together and banks are being supported. But the market's feeling very depressed."
Japan's Nikkei managed to eke out a 1.8 percent gain following a rebound on Wall Street on Tuesday, but MSCI's measure of other Asian stock markets put on just 0.2 percent.