World stocks mixed amid US recovery worries

World stock markets were mixed Friday as a drop in American factory output and weak U.S. regional manufacturing activities fueled concern over the strength of a recovery in the world's biggest economy.
In early trading in Europe, Britain's FTSE 100 rose 0.5 percent, Germany's DAX index gained 0.3 percent, and France's CAC-40 advanced 0.2 percent.
Japan's benchmark Nikkei 225 stock index lost 277.17 points, or 2.9 percent, to 9,408.38, its biggest drop since June 7.
The U.S. said Thursday its factory output dropped 0.4 percent in June, the most in a year, because of a slump in production of automobiles, home-building materials and processed food.
"Investors are concerned that the U.S. economic recovery is slower than expected, and a string of data only reinforced such worries," said Kazuhiro Takahashi, equity strategist at Daiwa SMBC Securities Co. Ltd.
The disappointing output figure, marking the first decline in four months, sent U.S. stocks down slightly Thursday as the Dow Jones industrial average lost 7.41 points, or 0.07 percent, to 10,359.31.
Apart from falling factory output, two U.S. regional manufacturing indexes sank in July, raising concern the U.S. economic recovery may be stalling.
The Nikkei stock index was also hit by heavy selling due to a strong yen, which hurts Japanese exporters as it cuts their overseas profits.
Japan's central bank Thursday raised its economic growth forecast for the year ending March 2011 to 2.6 percent from 1.8 percent, but warned a stronger yen could undermine exports. The dollar declined to 87.18 yen Friday from 87.42 yen Thursday.
Among top Japanese exporters, Sony Corp. dropped 45.0 percent to 2,404 yen. Toyota Motor Corp. lost 1.3 percent to 3,135 yen, while Honda Motor Co. fell 1.1 percent to 2.653 yen.
Japan's financial markets will be closed Monday because of a public holiday.
South Korea's Kospi shed 0.7 percent to 1,738.45, Australia's S&P/ASX 200 was down 0.5 percent at 4,422.70 and Hong Kong's Hang Seng index rose 0.06 percent to 20,267.87.
Shanghai's Composite Index was steady at 2,424.27 after China said Thursday its gross domestic product expanded by 10.3 percent in the second quarter from a year earlier, down from 11.9 percent growth in the first quarter.
"There was evidence in the June activity data that the economy is now slowing more sharply than anticipated," Capital Economics said in a report. "Signs the economy is slowing will heighten concerns about a hard landing."
The euro gained to $1.2937 from $1.2928.
Benchmark crude for August delivery was down 1 cent to $76.61 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 42 cents to settle at $76.62 on Thursday.
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Associated Press Writer Shino Yuasa in Tokyo contributed to this story.