European shares fell on Monday after Wall Street fell sharply in the previous session, as weak economic data from China and the eurozone raised concerns about the global growth outlook.
The Stoxx 600 meter slipped as much as 3% before cutting losses to trade 1% lower. The initial drop for regional meters reflects a short – but steep – drop for Nordic gauges, including the Swedish benchmark OMX 30, which fell as much as 7.9% before recovered to trade 1.3% lower.
Markets in the UK were closed for the holiday, as were markets in Hong Kong and mainland China.
Monday’s European stockpile sales came after a closely watched survey showed activity in China’s manufacturing sector slowed last month at its most severe pace since February. 2020 as the coronavirus lockdown deals a blow to the country’s economy.
China’s official Purchasing Managers’ Index registered 47.4 last month, from 49.5 in March, according to data released over the weekend. Any number below 50 signals a contraction.
The report by Caixin China General Manufacturing, a separate survey, also points to a more rapid slowdown in the country’s vast factory industry. “Further tightening of Covid-19 restrictions in China resulted in a significant decline in both output and new business at the beginning of the second quarter,” the report said.
Meanwhile, S&P’s global euro zone factory PMI fell to a 15-month low in April as manufacturing growth came to a near stagnation.
Chris Williamson, chief business economist at S&P Global, said: “Not only are companies reporting ongoing problems with component shortages exacerbated by the Ukraine war and the waves New closings in China, where rising prices and an increasingly uncertain economic outlook also hit demand. .
In a sign of worries about the global economy, Brent crude, the international oil benchmark, fell 2.4% to $104.54 a barrel.
U.S. futures tracking the technology-heavy S&P 500 and Nasdaq 100 index rose 0.3 percent and 0.4 percent, respectively, following losses of 3.6 percent and 4.2 percent for the S&P index. benchmark and Nasdaq Composite on Friday. Nasdaq’s decline in April was 13.3% overall, marking worst monthly drop This is the worst month for the benchmark S&P index since the market auction in early 2020.
The Nasdaq sell-off in recent weeks comes as traders ramped up bets on the US Federal Reserve tightening monetary policy to curb rising inflation, which hit 8.5. % annually in March – the fastest in 40 years. . Ahead of Wednesday’s much-anticipated Fed policy meeting, markets are pricing in a huge rate hike by half a percentage point, followed by similar hikes in the next two meetings. The current key interest rate range is 0.25 to 0.5%.
Higher interest rates could reduce the appeal of more speculative firms, whose expected profit streams have been disrupted during the pandemic due to low borrowing costs.
In the government debt market, the yield on 10-year US Treasuries – considered a proxy for borrowing costs around the world – added 0.04 percentage points to 2.92% on Monday. . Bond yields increase as their prices fall.
