Global concerns over economic growth made for a gloomy session across equity trading floors Friday as investors digested weak indicators and tired of hoping for a US-China trade talks breakthrough.
Key European stock markets were all lower at the close, with Frankfurt again the weakest performer after the outlook for German growth, crucial for the eurozone, became the focus of investor jitters.
Wirecard shares were the main losers on the German DAX index as fraud allegations piled on top of investors’ concerns about lack of transparency, costing the stock around 13 percent of its value by the close.
“A varied set of indicators flashing signs of slowing global growth were enough to unnerve investors,” said Jasper Lawler, head of research at LCG.
Wall Street was also down in the late New York morning and looked poised to clock up a third straight day of losses.
“The past 24 hours has been dominated by growth concerns, with UK, eurozone, and now Australian GDP expected to come in significantly lower than had previously been speculated,” IG analyst Joshua Mahony said.
Earlier, Tokyo led an Asia-wide slump, while Hong Kong returned from the three-day Lunar New Year break also in the red as investors reacted to negative signals from the US ahead of crunch trade negotiations in Beijing.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to travel to China next week for a third round of talks.
But US President Donald Trump told reporters he did not expect to meet his Chinese counterpart Xi Jinping before the March 1 deadline, when US duties on $200 billion in Chinese imports are due to jump sharply.
Analysts say Trump meeting with Xi in person ahead of the cut-off would make a meaningful deal more likely, but had flagged the difficulty of matching schedules with the US president flying to Vietnam to meet North Korea’s Kim Jong Un later this month.
“While progress has been made in these fraught negotiations, the two sides still remain some way from a deal, denting market sentiment,” said Mahony.
Top White House economist Larry Kudlow further doused expectations by saying Washington and Beijing are a “sizeable distance” apart in talks.
The imposition of the tariffs could weaken the global economy after a brief rally at the start of 2019, economists say.
Tokyo closed down two percent, although Sony bucked the trend to soar more than four percent after announcing a plan for share buybacks worth up to 100 billion yen ($910 million).
Global stocks had already tumbled on Thursday after the European Commission slashed its eurozone growth forecast for this year on an unexpected slowdown in Germany, Brexit woes, tensions over lacklustre growth prospects in Italy, and French protests.
The commission, the EU’s executive arm, is now expecting growth of 1.3 percent in the eurozone this year, a significant cut from 1.9 percent predicted in November.
The pound was little changed the day after EU President Donald Tusk warned that there was “no breakthrough in sight” in Brexit talks, while the Bank of England warned the UK economy was “not prepared” for a potential no-deal Brexit.
source: ARY News