Week ends on downbeat note

Yesterday saw big falls in the Chinese and US stock markets.

Bloomberg reports the fall in China:

China's shares dropped the most in almost three weeks on speculation the government will raise interest rates to tame a stock-market boom and cool the economy. Industrial & Commercial Bank of China Ltd. paced the decline.

The CSI 300 Index slid 145.85, or 3.5 percent, to 4051.43 at the close, the biggest percentage change among markets included in global benchmarks. Citic Securities Co., the biggest listed brokerage, and China Vanke Co., the largest developer, fell.

And in the US:

U.S. stocks plunged, capping the worst week for the Standard & Poor's 500 Index since early March, as concern intensified that banks will be saddled with losses on mortgage bonds...

The S&P 500 Index lost 19.63, or 1.3 percent, to 1502.56. The Dow Jones Industrial Average fell 185.58, or 1.4 percent, to 13,360.26. The Nasdaq Composite Index slid 28, or 1.1 percent, to 2588.96.

What little economic data that were released yesterday were not too positive either.

In Europe, Bloomberg reports that German business confidence fell in June.

German business confidence fell more than economists forecast in June after a rebound in oil prices and higher borrowing costs raised concern economic growth may slow from the fastest pace in six years.

The Ifo institute's sentiment index, based on responses from 7,000 executives, fell to 107 from 108.6 in May, the Munich-based research institute said today. Economists predicted a decline to 108.4, the median of 43 forecasts in a Bloomberg survey showed.

And industrial orders in the euro zone were down in April.

European industrial orders fell in April as the higher euro damped exports of the region's textiles and machinery.

Orders in the euro area fell 0.4 percent from the previous month, the European Union statistics office in Luxembourg said today. Economists had forecast a decline of 0.8 percent, according to the median of 15 estimates in a Bloomberg News survey. From a year earlier, orders increased 12.2 percent, compared with an 8.1 percent rise in March.

In the US, the ECRI's latest gauge of the economy was also down. From Reuters:

The Economic Cycle Research Institute, an independent forecasting group, said its Weekly Leading Index, or WLI, was at 142.9 in the week ended June 15, versus a downwardly revised 143.7 in the prior week. It cited slower housing activity, higher interest rates and lower stock prices.