A look at economic developments around the world

A look at economic developments and stock market activity around the world Tuesday: ___ LONDON–Bank of England Governor Mervyn King told British lawmakers that banks could require more capital injections before they are in conditions to resume lending, a problem he defined as the biggest challenge facing the country's financial institutions. King also gave his approval to the government's prebudget report, which Treasury head Alistair Darling announced Monday. Meanwhile, mortgage lending in Britain fell 52 percent in October from the same month a year earlier, said the British Banker's Association, an industry group. The FTSE 100 index of leading British shares closed up 18.29 points at 4,171.25. BEIJING–The World Bank cut its economic growth forecast for China to 7.5 percent next year–the lowest rate since 1990–from 9.2 percent. But the multilateral lender said Beijing's multibillion-dollar stimulus plan will help the fourth-largest economy weather the downturn. The World Bank's China representative also said Beijing is talking with the World Bank about providing financing for loans to other developing countries. Chinese stocks fell for a fourth trading session Tuesday amid enduring unease about the economy. The benchmark Shanghai Composite Index ended down 0.44 percent, or 8.35 points, at 1888.71. On China's second, smaller exchange, the Shenzhen Composite Index slipped 0.23 percent to 531.6. SYDNEY, Australia–BHP Billiton Ltd., the world's biggest mining company, abandoned a hostile $68 billion takeover bid for rival Rio Tinto Ltd., blaming the global economic downturn and plunging commodity prices. BHP launched a hostile, all-stock bid in February, offering 3.4 BHP shares for every share of Rio Tinto in a deal then valued at about $147 billion–one of the world's biggest takeover offers. But the stock prices of the two companies have plummeted since then along with global markets, and the bid's value shrank to around $68 billion. Australia's benchmark S&P/ASX200 index leaped 5.8 percent to close at 3,623.4, led by materials, energy, banks and consumer-discretionary stocks. VALENCIENNES, France–President Nicolas Sarkozy said he would announce a "rather massive" plan in the coming days to support the automobile and building industries, victims of the economic crisis. He gave no details of the plan. Meanwhile, the Paris-based Organization for Economic Cooperation and Development (OECD) said the financial crisis will likely push the world's developed countries into their worst recession since the early 1980s. The OECD said economic output will likely shrink by 0.4 percent in 2009 for the 30 market democracies that make up its membership. It also warned of rising unemployment and possible deflation. The CAC-40 index gained 1.2 percent to settle at 3,209.56. BERLIN–The GfK research group said its forward-looking consumer climate index for December stood at 2.2 points–up from 1.9 points in November and the third consecutive small increase, although the level remains low. The improvement in workers' outlook, helped by falling fuel prices and an industrial wage deal, comes despite this month's news that the German economy, Europe's biggest, went into recession in the third quarter, and a day after another survey showed business confidence at a 15-year low. Germany's DAX closed up 6.09 points at 4,560.42. SAO PAULO, Brazil–Brazil's Ibovespa index rose 1.8 percent to 34,813, while Mexico's IPC index ended 1.2 percent lower at 19,298. The Merval index in Buenos Aires, Argentina rose 0.5 percent to 906 and Chile's IPSA dipped 0.2 percent to 2,413. JERUSALEM–The Israeli government unveiled a multibillion-dollar plan to cushion the country's economy from the financial storm walloping world markets. It will provide 6 billion shekels ($1.5 billion) in guarantees to help Israel's highly centralized banking sector raise capital so it can extend more credit. An additional 5 billion shekels ($1.25 billion) will be used to prop up corporate bonds and protect bondholders. Last week, the ministry presented a 21.7 billion-shekel ($5.4 billion) economic stimulus plan that includes stepped-up infrastructure investments, credit for smaller businesses and exporters, and job training and hiring subsidies. In Tel Aviv, the TA-100 index rose 5 percent to close at 580.48. OSLO, Norway–Norway's vast fund for oil wealth investment posted a 7.7 percent loss on investment for the third quarter, but still grew in size due to record transfers of surplus wealth from the national government, the central bank announced. Despite the cash infusion, the fund's investments suffered their worst performance since the fund was founded in 1996 to invest the country's excess oil wealth. The Oslo index inched 1.56 points to close at 256.23. ZURICH, Switzerland–Three former top executives who oversaw massive subprime losses at Swiss banking giant UBS AG said they are forgoing 33 million Swiss francs ($27.7 million) in salary and other payments. Swiss shares edged up 11.99 points to 5,478.39. SEOUL, South Korea–Thousands of farmers rallied Tuesday against a pending free-trade deal with the U.S., saying the accord threatens their livelihoods. Police said about 11,000 farmers took part in the protest. They were joined by a few members of the National Assembly. Meanwhile, the benchmark Kospi rose 1.4 percent to 983.32. HONG KONG–The blue-chip Hang Seng Index rose 420.66, or 3.4 percent, to 12,878.6 points, as markets across Asia gained on news of the U.S. government's plan to rescue Citigroup Inc. and Monday's rally on Wall Street. Japan's benchmark Nikkei 225 stock average also surged 413.14 points, or 5.22 percent, to 8,323.93 in its second straight session of strong gains. BRUSSELS, Belgium–European Union regulators approved a Latvian government rescue plan for JSC Parex Bank. The European Commission said the aid was needed to avoid a "serious disturbance" in the Latvian economy, which has been hard hit by the world economic turmoil. The EU said on Saturday it would provide financial support to Latvia after the Baltic nation appealed for help from the European bloc and the International Monetary Fund to stabilize its deteriorating economy. ISLAMABAD, Pakistan–The economic crisis threatening Pakistan eased after the International Monetary Fund agreed to a $7.6 billion bailout, though experts warned that the militancy-torn country remains at risk without more aid from the West and painful reforms at home. The IMF loan program approved Monday banished the immediate risk of a currency crash and debt default in a country already creaking under the pressure of 25 percent inflation and slowing economic growth. ALMATY, Kazakhstan–Kazakhstan's government approved a $10 billion financial rescue package that it hopes will lead the oil-rich country out of economic crisis over the next two years. The global financial crisis has put a severe liquidity squeeze on the Central Asian nation and sharply reduced income from oil exports, forcing authorities to draw up ambitious plans to revive the economy.