By JOE McDONALD, AP Business Writer Joe Mcdonald, Ap Business Writer

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1 hr 9 mins ago

BEIJING – World stock markets slid Wednesday as the yen hit a fresh 15-year high against the dollar and new concerns bubbled about Europe’s banks after a report they have more risky government debt than thought.

The mood among investors was downbeat a day after The Wall Street Journal reported European Union stress tests of 91 banks in July understated some lenders’ holdings of potentially risky debt.

“That is another negative driver of sentiment,” said Jackson Wong, investment manager for Tanrich Securities in Hong Kong. Investors were also locking in profits after some gains last week, he said.

Fears that the global economic recovery was rapidly losing momentum appeared to ease last week but the respite has proven to be shortlived with Europe’s debt crisis threatening to flare up again.

Early in Europe, Britain’s FTSE 100 lost 0.6 percent to 5,376.11 while Germany’s DAX was off 0.6 percent at 6,083.4. France’s CAC-40 declined 0.5 percent to 3,624.88. Wall Street was set to fall with Dow Jones futures down 17 points, or 0.2 percent, at 10,322.

Japan’s benchmark Nikkei 225 stock index dived 201.40, or 2.2 percent, to 9,024.60, with exporters pressured by the yen’s continued strength. A strong yen hurts Japanese companies like Toyota Motor Corp. and Sony Corp. as it cuts their overseas profits and threatens to derail the country’s fragile economic recovery.

China’s benchmark Shanghai Composite Index shed 0.1 percent to 2,695.29 amid fears of new property curbs and Hong Kong’s Hang Seng index lost 1.5 percent to 21,088.86.

Investors worried that Beijing might impose new curbs to cool the housing market ahead of the peak sales season of September and October, analysts said. That may include halting mortgage discounts and loans to developers.

“Heavyweights, including banks and real estate stocks, remained sluggish, because it is unclear where the government policies are heading,” said Li Jun, an analyst for Central China Securities in Shanghai.

Elsewhere, South Korea’s Kospi declined 0.5 percent to 1,779.22. India’s Sensex was down 0.2 percent at 18,598.63 and Australia’s S&P/ASX 200 fell 0.8 percent to 4,537.20. Shares in Taiwan, Malaysia and Singapore all retreated.

On Tuesday, the Dow Jones industrial average dropped 107.24 points, or 1 percent, to 10,340.69.

In currencies, the euro fell to $1.2671 from $1.2682 in New York late Tuesday. The dollar fell to 83.57 yen from 83.74 yen.

Benchmark crude for October delivery was down 49 cents at $73.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 51 cents to settle at $74.09 on Tuesday.