European equities dip on Chinese economic gloom
February 01 2016 09:26 PM
KRISHNAN
Traders work at their desks at the Frankfurt Stock Exchange. The DAX 30 lost 0.41% yesterday.

AFP/London

Europe’s main stock markets and US stocks fell yesterday after losses across most of Asia on poor Chinese data and a drop in oil prices.
Frankfurt, London and Paris ended the day down around half of one per cent, as investors eyed sliding share prices in Shanghai and Hong Kong, and declining oil prices.
London’s FTSE 100 was down 0.39% to 6,060.10 to close the trading yesterday. Frankfurt’s DAX 30 yesterday lost 0.41% at 9,757.88, CAC 40 in Paris fell 0.56% at 4,392.33 and
Euro Stoxx 50 lost 0.79% to close at 3,021.01 yesterday.
Stock markets around the world had rebounded before the weekend, ending a volatile month with a bang after the Bank of Japan’s shock announcement.
“Ever-worsening manufacturing numbers from China along with a pullback from crude oil is reversing the bullish sentiment we saw last week,” said analyst Manoj Ladwa at broker TJM Parners.
US stocks dropped yesterday with the Dow Jones Industrial Average at 16,413.19, down 0.32% around noon in New York.
The broad-based S&P 500 shed 0.27%, while the tech-rich Nasdaq Composite Index lost 0.26%.
Oil prices dipped yesterday as the rally sparked by prospects of a cut to the global supply glut faded. Analysts cautioned against putting too much hope on talks between non-Opec crude producer Russia and the cartel on reducing output in a move that could support prices.
In another example of weakness in China’s economy, the official Purchasing Managers Index showed its manufacturing sector shrank in January for the sixth straight month and was now at its weakest since August 2012.
A separate reading from China’s financial magazine Caixin showed a minor improvement but also pointed to contraction.
“While the January PMIs were a little subdued, we still expect the fortunes of China’s economy to improve during the course of this year,” said analyst David Rees at Capital Economics.
Still, economist Jeremy Cook at traders World First pointed out “that deterioration is the sixth month in a row - the worst on record.”
Worries about the slowdown in the world’s second biggest economy – and its leaders’ handling of it – were among the key reasons for a rout across global markets in January that wiped trillions of dollars off valuations.
“Investors are still banking on Chinese policymakers to pull out all the stops and provide momentum for growth,” noted Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.
Traders meanwhile cautioned that trading would remain muted in Asia this week ahead of the Chinese lunar New Year holiday.

Last updated:


There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MORE NEWS

HAPPENING IN DOHAMore