LONDON — European and Asian stock markets mostly fell today after a two-day rally amid profit-taking and concerns that the global efforts to restore confidence in the battered financial system will not be enough to stave off a deep recession.

The FTSE 100 index of leading British shares was down 130.91 points, or 3.0 percent, at 4,263.30. Germany's DAX was 127.03 points, or 2.4 percent, lower at 5,072.16, while France's CAC-40 was 85.29 points, or 2.4 percent, down at 3,543.23.

The losses in Europe's follow similar declines in the U.S. and most Asian markets, except Japan.

"After a bumper start to the week, the inevitable reversal for equity markets does seem to be under way but there's certainly no real belief so far that this will mark the end of the rally at least in the short term," said Matt Buckland, a dealer at CMC Markets.

"Instead, we're seeing some profit taking and a reassessment of positions after the upswing, although there is an element of concern as to the longer term economic outlook creeping in," he added.

The upswing seen in the early part of the week was due to the unveiling of a series of bank rescue packages from governments around the world to restore confidence.

Concerns about the global economic outlook are clear also in the price of oil, which has fallen another $1.07 to $77.56, near the year lows recorded last Friday when stock markets around the world collapsed.

OTTAWA — Canadian Prime Minister Stephen Harper, the first major world leader to face voters since the global financial meltdown, led his Conservative Party to victory in Tuesday's election but was forecast to fall short of a majority in Parliament.The election agency reported on its Web site that the Conservatives had won or was leading in races for 143 of Parliament's 308 seats, an improvement over the 127 seats the party had in the previous Parliament.But, based on results obtained directly from election officials, Canadian Broadcasting Corp. predicted the Conservative Party would not win the 155 seats needed to govern on its own. That would force it to again rely on opposition support to pass budgets and legislation — as it has had to since a 2006 election victory.

BAGHDAD — The Iraqi puppy adopted by an American soldier but refused a flight to the U.S. is alive, the military said Tuesday, giving hope to an animal rescue group that is trying to take it to the United States.The case has cast a spotlight on Defense Department rules that prohibit soldiers in the U.S. Central Command, which includes Iraq, from adopting pets or transporting them home.Army Sgt. Gwen Beberg, 28, of Minneapolis, tried to send Ratchet home with the help of Operation Baghdad Pups earlier this month as she prepared to leave Iraq.But the dog was reportedly confiscated by a U.S. officer before it could reach the Baghdad International Airport, raising concern about the animal's fate.U.S. military spokesman Lt. Cmdr. David Russell said in an e-mail that the dog was alive, but he could provide no other details or comment on the effort to take it to the United States.More than 30,000 people have signed an online petition urging the Army to let the puppy go home with Beberg, nearly tripling in a day as publicity over the case spread.

DAMASCUS, Syria — The foreign ministers of Syria and Lebanon signed an agreement today formalizing diplomatic ties between the two countries for the first time in their turbulent history.The signing comes a day after Syrian President Bashar Assad issued a decree establishing diplomatic relations with its smaller neighbor — a long-standing demand of the U.S. and Lebanese politicians opposed to Syria's influence in the country.The two countries have not had formal diplomatic relations since both gained independence from France in the 1940s, which many Lebanese viewed as a result of Syria's refusal to recognize Lebanon's sovereignty.Recognition of Lebanon could help Syrian aspirations to build trust with the West as it pursues indirect talks with Israel, mediated through Turkey.