LONDON - World stock markets fell Wednesday amid ongoing worries about sovereign credit risks and ahead of a key budgetary policy statement from the British government.

In Europe, the FTSE 100 index of leading British shares was down 13.89 points, or 0.3 percent, at 5,209.24 while Germany's DAX fell 21.88 points, or 0.4 percent, at 5,666.70. The CAC-40 was 21.77 points, or 0.6 percent, lower at 3,763.53.

Sentiment in the market has been knocked in the last couple of days by worries about a global debt crisis. Moody's Investor Services said the United States and Britain must get a grip on their public finances to avoid threats to their top triple-A credit ratings and Fitch downgraded its rating on Greece.

"Greece's debt downgrade will still be adding to worries about the exposure of European banks," said Arifa Sheikh-Usmani, equity trader at Spreadex.

Later Wednesday, the British finance minister Alistair Darling delivers his latest projections about the country's debt -- Darling has all but admitted that his most recent forecasts were way too optimistic as the recession proved to be longer and deeper than anticipated.

Analysts say he will predict that Britain will end up borrowing a staggering 190 billion pounds ($310 billion) in the fiscal year 2009-10, which is equivalent to over 13 percent of the country's gross domestic product, and announce a strategy to bring the public finances into shape over the medium-term.

Cameron Peacock, research analyst at IG Markets in Melbourne, Australia, said Darling's statement will be closely eyed in London as it could have "important ramifications" for a number of sectors, most notably the banks which could face curbs on their bonuses.

The pound will also be in the spotlight when Darling makes his statement as currency investors fret about a possible ratings downgrade after Moody's warning.

"Any tinkering around the edges, or political grandstanding will in all likelihood not be well received and send the pound lower," said Michael Hewson, analyst at CMC Markets.

By midmorning London time, the pound was 0.1 percent higher at $1.6309 while the euro was up 0.2 percent at 0.9051 pounds.

Earlier, investors in Asia were rattled after government figures showed that Japan grew far less than originally expected in the third quarter, at an annualized rate of 1.3 percent instead of 4.8 percent, as cautious companies slashed spending.

Japan's Nikkei 225 stock average fell 135.75 points, or 1.3 percent, to 10,004.72, while Hong Kong's key index shed 318.76, or 1.4 percent, to 21,741.76, and Shanghai's benchmark was off 1.7 percent at 3,239.57.

Australia's market lost 0.7 percent and Singapore's market was off 0.3 percent.

The South Korean market bucked the trend and advanced 0.4 percent to 1,634.17 after the International Monetary Fund raised the country's economic growth forecast for 2010. Taiwan's market also rose 0.4 percent.

U.S. markets, which were hit Tuesday by a mix of debt concerns and disappointing corporate reports from the likes of McDonald's Corp., are expected to open modestly higher -- Dow futures were up 15 points, or 0.2 percent, at 10,286 while the broader Standard & Poor's 500 futures rose 2 points, or 0.2 percent, to 1,092.

Oil prices rose as an unexpected drop in U.S. crude supplies suggested demand may be recovering.

Benchmark crude for January delivery was up 87 cents to $73.49 in electronic trading on the New York Mercantile Exchange. The contract dropped $1.31 overnight.

Gold prices continued to fall, losing 0.5 percent to $1,137.30 an ounce.

The dollar fell 0.6 percent to 87.83 yen, while the euro rose 0.4 percent to $1.4761.