Around the world | Economic developments

A look at economic developments and stock-market activity around the world Tuesday:

BRUSSELS, Belgium

European Union finance ministers endorsed a public spending plan that would pump 200 billion euros ($252 billion) over two years into the economy in an effort to get out of recession. The ministers called a recovery plan drafted by the European Commission a good basis to stimulate the economy of the 27-country EU, which shrank 0.2 percent in the second and third quarters. A final decision on the spending package lies with the EU leaders who meet in Brussels Dec. 11-12.

LONDON

The FTSE 100 index of leading British shares closed up 1.4 percent at 4,122.86. Germany’s DAX was the best-performing European index, up 137 points, or 3.1 percent, at 4,531.79. The CAC-40 index in France ended 2.4 percent, or 72.47 points, higher at 3,152.90.

TOKYO

Japan’s central bank unveiled measures to encourage cautious banks to lend more to companies, many of whom are struggling to raise enough money to carry them through the year-end crunch. At an emergency meeting, the Bank of Japan said it would temporarily accept lower-rated corporate debt as collateral from commercial banks starting Tuesday. The Bank of Japan also said it would provide unlimited funds collateralized by corporate debt at 0.3 percent interest — the bank’s current policy rate. Meanwhile, Japan revised its reading of fiscal 2007 economic growth higher to 1.9 percent from 1.7 percent, citing a stronger-than-expected rise in capital investment. But the benchmark Nikkei 225 stock average lost 533.53 points, or 6.35 percent, to close at 7,863.69. The broader Topix index fell 4.88 percent to 787.12.

BEIJING

The benchmark Shanghai Composite Index fell 0.3 percent, or 4.98 points, to close at 1889.64. The Shenzhen Composite Index for China’s smaller second exchange rose 1.4 percent to close at 562.47. Meanwhile, in Washington, Treasury Secretary Henry Paulson says China must continue to allow its currency to rise in value against the dollar as part of reforms to address trade tensions with the United States. Paulson praised the Chinese for allowing their currency to rise in value by more than 20 percent against the dollar since July 2005, but says it is critical that the currency reform process is allowed to continue.

SYDNEY, Australia

Australia’s central bank slashed its key interest rate by one percentage point, to 4.25 percent, in the latest bold move by the country’s top finance officials to stave off a recession. The reduction is the fourth in three months by the Reserve Bank of Australia and takes the cash rate to its lowest level since May 2002. The benchmark S&P/ASX200 index closed down 4.16 percent at 3,528.2 points, while the broader All Ordinaries index closed down 4.02 percent at 3,473.4.

HONG KONG

The blue chip Hang Seng index dropped 702.99 points, or 5 percent, to 13,405.85, snapping a five-day winning streak. The benchmark index gained 9.7 percent last week. Benchmarks in the Philippines, Taiwan, India and South Korea also dropped sharply.

MADRID, Spain

The number of people filing jobless claims in Spain soared to almost 3 million following a 6 percent rise in unemployment registrations in November, further evidence of the country’s economic troubles. The increase was nevertheless somewhat slower than the 7.3 percent increase registered in October.

AMSTERDAM, Netherlands

The Netherlands arm of India’s Tata Steel said it has requested government support to furlough 4,600 people, around half of its Dutch work force. Tata, operating under its European name Corus, applied with the Social Affairs Ministry for a six-week furlough for the workers.

SAO PAULO, Brazil

Industrial production fell 1.5 percent in October from September as the global financial meltdown sends shockwaves through Latin America’s largest economy. The hardest-hit sectors were the chemicals industry, petroleum and ethanol production and machinery and equipment manufacturing. Brazil’s Ibovespa stock index was up 0.8 percent to close at 35,001, while Mexico’s IPC rose by 225 points, or 1 percent, to 19,758. Colombia’s IGBC edged up 0.8 percent to 7,232, and Argentina jumped 2.9 percent to 952. Chile was the exception, dipping 0.7 percent to close at 2,318.

Source: Associated Press