World stocks fall after Goldman charged with fraud, China steps to cool home prices

World stocks fall amid Goldman case, China measure

HONG KONG — Asian stock markets dropped sharply Monday after investment bank Goldman Sachs was charged with fraud and China took more steps to corral real estate prices. European shares also fell in early trade.

China’s Shanghai market plummeted nearly 5 percent to lead regional losses that hit a broad range of industries. Oil prices slid more than $2 a barrel, while the dollar was off against the yen and stronger against the euro.

On Friday, U.S. markets retreated after the Securities and Exchange Commission said Goldman Sachs & Co. defrauded investors by failing to disclose key information about mortgage investments it sold as the housing market was collapsing in the run-up to the global financial crisis.

The news led to speculation that Goldman and other large banks could face stepped-up prosecution in connection with deals that contributed to the crisis, dragging on the massive profits banks have earned the last year with the help of government support.

“The market is questioning whether this is the only case or whether there will be more,” said Conita Hung, head of equity markets with Delta Asia Financial Group in Hong Kong. “The market is still quite sensitive to conditions and prospects for the financial industry.”

Early in Europe, Britain’s FTSE 100 and France’s CAC-40 shed 0.6 percent and 0.8 percent, respectively, and Germany’s DAX lost 0.6 percent. Wall Street futures pointed to more losses in the U.S. Monday. S&P futures were off 6.7 points, or 0.6 percent, at 1,183.60.

In Asia, Japan’s Nikkei 225 stock average fell 1.7 percent to 10,908.77 and Hong Kong’s Hang Seng index dropped 2.1 percent to 21,405.17. South Korea’s Kospi retreated 1.7 percent.

In China, investor sentiment was further bruised after the government announced more moves over the weekend to level off housing prices, including possible restrictions on lending to buyers who have already have two or more homes. Real estate prices have risen for months despite government measures and promises to curb speculative property investments.

Shanghai’s key index plunged 150 points, or 4.8 percent, to 2,980.30 — its biggest fall in eight months.

“This time, it seems that the government determination to cool home prices is bigger than before,” said Mao Nan, a strategist for Oriental Securities in Shanghai.

Stock markets in Australia Taiwan and Singapore were also sharply lower.

Financial names came under intense selling pressure in Asia, with Japanese banking shares among the heaviest casualties. Sumitomo Mitsui Financial Group Inc. fell 3.5 percent, and HSBC dropped 3.2 percent in Hong Kong.

In China, real estate shares set the tone in the market. Poly Real Estate Group, China’s second-biggest property developer, tanked 9.3 percent to 16.92 yuan.

Oil prices continued to slide, with benchmark crude for May delivery down $2.02 to $81.22 a barrel.

In currencies, the dollar was trading at 91.81 yen from 91.93 yen late Friday. The euro fell to $1.3433 from $1.3476.

Friday in the U.S., the Dow fell 125.91, or 1.1 percent, to 11,018.66. The Standard & Poor’s 500 index dropped 19.54, or 1.6 percent, to 1,192.13, while the Nasdaq composite index fell 34.43, or 1.4 percent, to 2,481.26.