LONDON (AP) — World stock markets fell yesterday as investors expected the latest reading of US economic growth to cement views that the Federal Reserve will provide further stimulus.

The world's largest economy is expected to have grown by an annual two percent in the third quarter. While that is an improvement from the previous quarter's 1.7 percent rate, it is still well below the pace needed to create jobs and fuel a sustainable recovery.

In Europe, Britain's FTSE 100 index was off 0.3 percent at 5,661.16 and France's CAC-40 fell 0.3 percent to 3,822.01. Germany's DAX shed 0.1 percent to 6,590.11.

Asian markets closed lower and Wall Street was set to fall, with Dow futures down 0.3 percent to 11,019. Broader S&P futures declined 0.4 percent to 1,174.90.

The US GDP figure may affect investors' views of the Fed's widely-expected stimulus measures next week.

The central bank is expected to buy Treasury bonds, known as quantitative easing, in a bid to drive interest rates lower, encourage lending and stimulate the US economy.

In Asia, the Nikkei 225 stock average closed down 1.8 percent at 9,202.45. Investor sentiment was undermined by a stronger yen, which hurts exporters as it cuts the value of their repatriated profits. The dollar slumped below 81 yen, nearing a post World War II record low of 79.75 yen set in 1995.

Adding to the gloom, Japan's industrial production fell for the fourth straight month in September, underscoring the country's fragile recovery.

Some analysts expect Asian policymakers will turn to capital controls to help stem a surge of cash into the region's markets that the Fed stimulus could trigger. The fear is that the wall of money will push Asian currencies even higher, hurting exports, particularly as China's yuan is effectively pegged to the dollar.

"Asia is worried about drowning in a sea of cash," HSBC said in a report. "With the Fed set to crank the pump again next week, officials are busy drawing up capital controls to fend off the tide."

South Korea's Kospi lost 1.3 percent to 1,882.95. Australia's S&P/ASX 200 fell 0.5 percent to 4,661.60.

The benchmark Shanghai Composite Index dropped 0.5 percent to 2,978.83 and Hong Kong's Hang Seng shed 0.5 percent to 23,096.32.

Shares in India, Taiwan and Indonesia also declined while Singapore and Malaysia gained.