World stock markets slid Monday, pressured by worries that global economic growth will slow as oil prices climbed amid the escalating conflict in Libya.
The uncertainty over the outcome of a bloody rebellion in OPEC-member Libya aimed at overthrowing longtime strongman Moammar Gadhafi outweighed any optimism over improving employment figures out of the U.S.
Because serious disruptions in oil production could put the global economic recovery in jeopardy, traders are closely watching Libya, where fighting between government supporters and its opponents has cut oil production in the OPEC nation in half.
Investors are also concerned violent protests and political upheaval could intensify in the Middle East, where Iran, Iraq, the United Arab Emirates, Kuwait, Bahrain, Qatar, Oman and Saudi Arabia have more than 60 percent of the world's proven oil reserves.
Early losses in European shares followed a down day in Asia. Britain's FTSE 100 dropped 0.3 percent to 5,973.36 and France's CAC 40 fell 0.4 percent to 4,002.62. Germany's DAX shed 0.5 percent to 7,141.26.
Futures augured losses on Wall Street. Dow futures eased 0.2 percent to 12,130 and broader S&P futures lost 0.2 percent to 1,317.80.
Japan's benchmark Nikkei 225 stock average closed down 1.8 percent, to 10,505.02. Sentiment in Tokyo was downbeat on growing political uncertainty after Japan's foreign minister resigned Sunday over illegal political donations, dealing a new blow to Prime Minister Naoto Kan's embattled administration.
Toyota Motor Corp., the world's largest car maker, dropped by 2.4 percent, hurt not just by oil prices but also a credit rating cut on Friday by Standard & Poor's due to profitability concerns. Other exporters suffered amid the uncertainty, including Honda Motor Corp., down 3.1 percent, and Canon Inc., down 2.4 percent.
Elsewhere, Australia's S&P/ASX 200 index declined 1.4 percent to 4,797.90, while the Shanghai Composite index was up 1.8 percent at 2,996.21 amid China's annual legislative session that is expected to announce steps to boost the domestic economy. Shares in Singapore and New Zealand also rose.
Soaring oil prices spooked investors on Wall Street Friday with the Dow Jones industrial average losing 88.32 points, or 0.7 percent, to 12,169.88. The fall came even though U.S. businesses added 222,000 jobs in February, the most since April 2010, and unemployment has fallen almost a full percentage point in three months.
Analysts at Citigroup Global Markets, in raising their average Brent Oil estimate from $100 to $105 for 2011, said in a report Monday that the unrest "seems contagious and as more countries are affected, low-risk regimes can become higher risk."
Kuwait, in particular, seemed vulnerable as groups there have called for mass demonstrations outside parliament Tuesday to demand that the government step down.
"If any of the more heavyweight OPEC producers are caught in the storm the potential impact on price increases," the report said.
Benchmark crude for April delivery was up $1.58 at $106 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.51 to settle at $104.42 a barrel on New York Mercantile Exchange, the highest level since Sept. 26, 2008.
In currencies, the dollar dropped to 82.09 yen from 82.27 yen in New York late Friday. The euro slipped to $1.3974 from $1.3984.