A look at global economic developments Economic Theory

A look at economic developments and activity in major stock markets around the world Thursday:

SHANGHAI — Slowing global demand and a retreat from stimulus policies led to a weakening in China's manufacturing in June for a third month.

Reports from Market Economics also indicated that manufacturing sector growth in India, South Korea, Australia and Taiwan was slowing.

In Asian markets, Japan's benchmark Nikkei 225 stock index closed down 2 percent, South Korea's Kospi index shed 0.7 percent, Australia's S&P/ASX 200 tumbled 1.5 percent and markets in Singapore, Malaysia and Taiwan also fell.

BERLIN — The European Central Bank said it is lending 111.2 billion euros ($136.7 billion) to banks in a six-day tender, completing an effort to smooth over the expiry of a record batch of loans.

The ECB said 78 banks subscribed to the operation, conducted as 442 billion euros in credit granted a year ago to support banks during the financial crisis expired.

That came after the central bank said Wednesday it would lend a lower-than-expected 131.9 billion euros to banks for three months. Neither the banks nor their nationalities were identified.

The outcome of the longer-term auction suggested that banks' cash needs are easing despite lingering worries about the impact of the eurozone debt crisis. More than 1,100 banks subscribed to last June's unusual 12-month operation.

LONDON — The industrial sector's growth cooled slightly in the 16 countries using the euro and the United Kingdom, according to manufacturing surveys.

European stocks fell. The FTSE 100 index of leading British shares closed down 2.3 percent, Germany's DAX dropped 1.8 percent and France's CAC-40 fell 3.

TOKYO — Major Japanese manufacturers, riding high from a booming Asia, haven't felt this good for a long time. Business confidence improved for a fifth straight quarter and was in positive territory for the first time in two years.

LONDON — The Bank of England says the amount of secured credit available to households increased slightly in the second quarter, but lenders say it might be more scarce in the July-September quarter.

BERLIN — A small rise in retail sales offered a hopeful sign for Germany's long-sluggish domestic demand, even as the country's economy minister mounted a robust defense of its export-heavy recipe for success.

MADRID — Spain successfully raised 3.5 billion euros ($4.3 billion) in an oversubscribed bond sale, a reassuring sign for markets a day after ratings agency Moody's warned it may join others in downgrading the country's debt.

BEIJING — A Chinese company canceled a $2.5 billion project to develop a bauxite mine in Australia, blaming difficult conditions in the global industry.

TIANJIN, China — Workers at a Japanese-owned electronics factory in the northern Chinese city of Tianjin were on strike over pay and benefits for a third day, the latest in a spate of labor disputes as an increasingly restive work force demands better conditions.

STOCKHOLM — The Swedish central bank raised its key interest rate for the first time in two years, saying the economy is recovering strongly from last year's global downturn.

The Riksbank raised the key repo rate by a quarter percentage point to 0.5 percent.

ATHENS, Greece — Prices of consumer goods and services have risen overnight in Greece, as a new sales tax hike takes effect in an effort to boost government finances.

SINGAPORE — Singapore real estate prices jumped to a record high in the second quarter as the city-state's economic recovery broadened.

NAIROBI, Kenya — Five nations in East Africa implemented new economic rules to boost cross-border employment and trade.

The new steps push forward a larger plan to integrate the economies of Burundi, Kenya, Rwanda, Tanzania and Uganda, which together form the East African Community.

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