The TSX followed world stock markets lower on Thursday as investors worried that the G20 summit might move for the withdrawal of support measures for the fragile global economy.

The Toronto Stock Exchange closed down 231.8 points, to 11,285.8 points. The energy subindex fell 1.68 per cent, while financials were off 3.65 per cent.

On Wednesday, the Federal Reserve kept interest rates unchanged at a policy meeting.

The Fed said the pace of economic activity has "picked up" since its last meeting in August, but it also said it would again slow some of its purchases of mortgage-backed securities, which have been part of the extraordinary support the central bank has given the U.S. economy over the past year.

Investors have focused on when central bankers and governments will begin to unwind some of the measures they have taken to boost the global economy since the onset of the global financial crisis one year ago. The issue will feature prominently at the two-day G20 summit getting underway in Pittsburgh on Thursday.

"I think people get scared when the central bankers talk about the withdrawal from the market," said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. "I think investors got coddled by the government for too long."

Wall Street fared slightly better on Thursday, with the S&P 500 index down 0.8 per cent, the tech-heavy Nasdaq index down a little more than one per cent, and the benchmark Dow Jones Industrial Average down 0.4 per cent.

In Europe, Germany's DAX was down 1.3 per cent, Britain's FTSE 100 dropped 0.7 per cent and France's CAC 40 lost 1.0 per cent.

Hang Seng biggest loser

In Asia, Hong Kong's Hang Seng index was the biggest loser, falling 544.79, or 2.5 per cent to 21,050.73. South Korea's Kospi declined 17.59, or 1.0 per cent, to 1,693.88.

Most other markets also lost ground, including Australia's benchmark, down 0.7 per cent, as lower oil prices hit commodity stocks. India's Sensex was off 0.8 per cent. Markets in the Philippines, New Zealand and Singapore also fell, but China's Shanghai index gained 0.4 per cent.

Japan's Nikkei 225 stock average, closed for the first three days of this week due to a string of national holidays, was Asia's bright spot, gaining 173.68, or 1.7 per cent, to 10,544.22.

In Tokyo trade, ailing Japan Airlines Corp. dived 15.8 per cent as its president met with officials to appeal for taxpayer funds to keep the carrier flying.

Struggling Japanese consumer finance company Aiful Corp. plunged 23.9 per cent after forecasting an annual loss and saying it will cut 2,000 jobs, or about 44 per cent of its workers.

Oil prices were also lower in Asia after falling nearly four per cent Wednesday on an unexpected jump in U.S. crude inventories that suggested consumer demand remains weak. Benchmark crude for November delivery was down 71 cents at $68.25 US.

With files from The Associated Press