Paris (AFP) – Stock markets in Asia and Europe slumped on Friday after data pointed to weakness in the Chinese and eurozone economies, despite further indications Beijing and Washington may be moving to end their trade row.
Signs of easing tensions had helped propel equities higher earlier this week, with both China and the United States seeming to give key concessions, fuelling hopes they can eventually resolve their differences.
But data showing that the trade war is already having an impact on China — consumer spending grew at its slowest pace in 15 years and factories eased up in November — prompted equities investors there to take their gains off the table.
“Investors were spooked by the largely disappointing numbers, and there was a sell-off in Asian markets,” said market analyst David Madden.
Hong Kong fell 1.6 percent and Shanghai closed down 1.5 percent.
Meanwhile, Tokyo finished two percent lower following a survey of confidence among Japan’s big businesses showed they remain cautious about the global outlook.
Then in Europe a survey showed that Global trade war fears and disruptions caused by anti-government protests in France pushed business growth in the eurozone to a four-year low in December.
The slide in IHS Markit’s composite eurozone PMI, to 51.3 points from 52.7 points in November, came just a day after the European Central Bank pulled its extraordinary support that has stoked growth in the single currency area for the past three years.
The survey for France showed business there had flipped into reverse, as the index plunged to 49.3 in December from 54.2 in November.
“Waning global growth sentiment continues to drag equity markets into the tank after a double whammy of major economic data misses has sent investors scurrying for cover,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
He said European risk assets are getting “pounded mercilessly” after the French PMI tumbled into contraction.
“While yellow vest protest is at the root of the issues there is no excuse for the wobbly German PMI print which suggests that the underlying eurozone economy remains soft, providing the key fundamental reasons to be underweight” in euro assets.
The euro briefly slid back under $1.13, a day after the European Central Bank said it was ending its programme of asset purchases which had propped up eurozone growth for the past three years, despite ECB boss Mario Draghi’s assessment that there were increasing risks to the economy of the single currency bloc.
The pound moved lower as European leaders refused pleas for help from Prime Minister Theresa May to push their Brexit deal through a fractured British parliament.
Oil prices fell, with traders also worried about the impact of slower growth, analysts said.
– Key figures around 1220 GMT –
London – FTSE 100: DOWN 0.8 percent at 6,824.15 points
Frankfurt – DAX 30: DOWN 1.0 percent at 10,814.30
Paris – CAC 40: DOWN 0.9 percent at 4,851.39
EURO STOXX 50: DOWN 0.9 percent at 3,083.24
New York – Dow: UP 0.3 percent at 24,597.38 (close)
Tokyo – Nikkei 225: DOWN 2.0 percent at 21,374.83 (close)
Hong Kong – Hang Seng: DOWN 1.6 percent at 26,094.79 (close)
Shanghai – Composite: DOWN 1.5 percent at 2,593.74 (close)
Pound/dollar: DOWN at $1.2584 from $1.2660 at 2130 GMT
Euro/dollar: DOWN at $1.1303 from $1.1361
Dollar/yen: DOWN at 113.57 yen from 113.61 yen
Oil – West Texas Intermediate DOWN 24 cents at $52.34 per barrel
Oil – Brent Crude: DOWN 30 cents at $61.15 per barrel
COMMENTS
Please let us know if you're having issues with commenting.