World markets were mixed Friday, as an overnight drop on Wall Street and more concerns about the U.S. housing and financial sectors led many investors to take profits after a recent rally.
European markets clawed back some of their losses earlier in the day after the U.S. government reported orders for durable items rose in June at the fastest pace in four months.
By late afternoon in Europe, the U.K.'s FTSE 100 was down 0.27 percent at 5,348.00. But Germany's DAX and France's CAC recovered from earlier falls to gain 0.06 percent to 6,444.44 and 0.58 percent to 4,373.28 respectively.
The news from the U.S. Commerce Department that orders for big-ticket items rose 0.8 percent last month, when economists had expected them to decline 0.4 percent, had "certainly helped" markets, said Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers in London.
Investors were still digesting a week of company results announcements in the U.S., Bowman added. Next week would be "another big week" in the U.S. with more company results announced as well as economic data, including non-farm payroll figures on Friday.
In Asia, stock markets fell sharply. In Japan, the Nikkei 225 index shed almost 2 percent to 13,334.76 points, dashing its three-day win streak. Australia's main stock index recorded its largest one-day fall in six months to finish almost 3.4 percent lower at 4,970.5.
Meanwhile, India's benchmark traded 3.4 lower; Hong Kong and mainland China markets were off around 1.5 percent.
Asia investors were dispirited by regional news after National Australia Bank, the country's largest bank, revealed losses of 830 million Australian dollars ($796 million) stemming from exposure to U.S. mortgage-backed debt securities.
Also weighing on regional bourses was the overnight performance on Wall Street, where major indexes fell 2 percent or more, including the Dow Jones industrial average, which lost more than 280 points.
For their part, U.S investors were troubled by data showing a worse-than expected decline in existing home sales in June _ a fresh reminder of problems with bad mortgage debt and tight credit. Oil's overnight uptick, as well as a rise in claims for unemployment benefits, added to worries.
Coming off solid gains, Asian markets were now seeing some profit taking, analysts said.
"We've had a few good days, but the U.S. was weak, oil has bounced a little, it's Friday. So naturally we expect some easing in the market," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC Co. in Hong Kong.
By midday in Europe, light, sweet crude for September delivery was changing hands at $125.61 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.05 to settle at $125.49 a barrel on Thursday.
In Japan, Wall Street's hefty losses took the biggest toll on share prices, said Mitsushige Akino, fund manager at Ichiyoshi Investment Management.
"That quickly fueled investors' lingering worries over the health of the U.S. economy," Akino said. He also said Friday's selling was aimed at locking in profits after recent gains.
Financials were among the worst hit. Mizuho Financial Group Inc. was down 8.2 percent, while Mitsubishi UFJ Financial Group Inc. lost 5.4 percent.
Japan's top automaker Toyota Motor Corp. fell 3.5 percent. Honda Motor Co. lost 2.1 percent, though after the close of trade it reported record profit that beat expectations for the fiscal first quarter, thanks partly to sales growth in new markets.
In South Korea, shares in Samsung fell more than 6 percent after the company posted earnings that missed some estimates.
Elsewhere, China's benchmark Shanghai Composite Index fell 1.6 percent to close at 2,865.10. The Shenzhen Composite Index dropped 0.7 percent to close at 860.689.
Some market heavyweights were down, including China Life Insurance, the country's biggest life insurer, which fell 3.9 percent. Baosteel Group Co., which until late last month was China's biggest steel company, fell 2.8 percent.
In Hong Kong, losses spread across most industries as the blue-chip Hang Seng Index dropped 1.5 percent to 22,740.71, though it erased some of its losses as investors bought or covered shorts near the market's close, analysts said.
Coal companies such as China Shenhua took a drubbing after reports said Beijing will tighten controls on coal prices. China Shenhua slid 6.7 percent; Yanzhou Coal was off 6 percent.
Oil issues also were down. Upstream producer CNOOC slipped 3.6 percent.
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AP Business Writer Jeremiah Marquez contributed to this report from Hong Kong.
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