LONDON -- World markets were mostly down Wednesday amid worries that the current pace of economic recovery, particularly in the U.S., does not justify the rally seen in stocks since March. In Europe, the FTSE 100 index of leading British shares was down 35 points, or 0.8 percent, at 4,296.50 while Germany's DAX fell 59 points, or 0.8 percent, to 4,296.50. The CAC-40 in France was 29 points, or 0.9 percent, lower at 3,186.50. Earlier in Asia, Hong Kong's Hang Seng index dropped 80.90 points, or 0.5 percent, to 18,084.60, though Japan's Nikkei bucked the downward trend, gaining 87.97 points, or 0.9 percent, to 9,840.85. With some indexes up more than 50 percent since March on expectations of an economic turnaround this year, markets have begun to stumble amid worries stock prices have gotten too far ahead of economic fundamentals. News that American industrial production fell by a bigger-than-expected 1.1 percent last month gave investors even more reason to hold back. It marked the seventh straight monthly drop and distracted traders from more upbeat figures on home construction, building permits and inflation. The stock market rally since March's lows has been fueled by hopes that the U.S. economy in particular will recover from recession sooner than previously anticipated. As equities usually start rising 6 to 9 months before actual recovery emerges in the official data, this suggests investors believed the massive sell-off in markets during the most acute phase of the financial crisis was overdone. Some of the world's major equity indexes are now in positive territory for 2009. That optimism has dissipated in recent days, however. Rising interest rates on U.S. government bonds and higher oil prices have combined to worry investors that any recovery around the world could be choked off at birth. "Although there are plenty of analysts looking for a big correction in equity markets it does not necessarily mean that it will happen and perhaps those calling for a correction are the ones that missed the rally," said Mitul Kotecha, an analyst at Calyon Credit Agricole. "Nonetheless, equity market momentum is fading fast." That is not expected to change when Wall Street opens later. Dow futures were 11 points, or 0.1 percent, lower at 8,448 while the broader Standard & Poor's 500 futures fell 0.5 points to 907.30. On Tuesday, the Dow Jones industrial average fell 1.3 percent, to 8,504.67, while the S&P dropped 1.3 percent to 911.97. Investors, it seems, are awaiting signs that the rally since March wasn't just misplaced euphoria. They now want to see clear evidence that the world economy and company earnings are recovering so that current stock valuations make sense. In March, many investors, awash with cash after bailing out from a sliding market, saw valuations around the world as particularly cheap. Neil Mackinnon, chief economist at ECU Group, noted that the S&P 500 in the U.S. is "not cheap" at the moment at 16 times earnings and that the 925 level "is starting to falter." Elsewhere in Asia, South Korea's Kospi shed 0.6 percent to 1,391.17 while Australia's benchmark fell 1.5 percent Shanghai's stock measure recovered the session's losses to close higher by 1.2 percent, as investors found encouragement in comments from President Hu Jintao. Hu said Tuesday that Beijing's stimulus is showing results and China is determined to take the lead in emerging from the global economic crisis. Investors were wary after the Chinese government last week reported conflicting data showing exports falling but consumer spending and investment higher. "Investors have opposite interpretations on the data, but the president's speech made it clear to those fence-sitters and it's a boost to the market," said Tang Yonggang, an analyst for Hongyuan Securities in Beijing. Oil prices were down slightly, with benchmark crude for July delivery down 27 cents to $70.20. On Tuesday, the contract fell 15 cents. In currencies, the dollar was steady at 96.20 yen while the euro rose 0.4 percent to $1.3868.

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