Global markets are trading mostly into the red amid the growing recessionary fears in the US, as well as negative European business data in March.
The growth of the US economy slowed down, with the overall index of production in the private sector falling to 54.3 points from 55.5 points in February. Overall, business activity in the US industrial sector slowed down to a 21-month low, and service activity fell to a two-month low. The index, which estimates production, collapsed to a 33-month low of 51.6 points, compared to 52.7 points in February. This slowdown in the industrial expansion is contributing to weaker new industrial orders, employment, and manufacturing.
On the other hand, the euro area business is performing much worse than expected in March, against the backdrop of the fastest slowdown in factory activity in nearly six years, driven by a significant drop in demand.
The overall Purchasing Managers’ Index (PMI) declined to 51.3 points in March from 51.9 points in February. This is significantly below forecast for a slight acceleration to 52 points.
At the same time, trade talks between Beijing and Washington continue. Later this week, the group of US negotiators is expected to visit the Chinese capital in a new round of talks.
The expectations are the two countries to reach a deal in April despite the uncertainty that continues to affect the mood of investors.
The markets are also dealing with the uncertainty surrounding the United Kingdom’s exit from the European Union, with the risk of a potentially major “no-deal” shock to the European economy still only just over two weeks away.
Asian markets recap
The main stock indexes of the Asia-Pacific region ended today’s trading session with decreases amid the fears of a recession in the United States.
In Japan, the blue-chip index Nikkei 225 wiped out 650.23 points, or 3.01%, ending the day at a level of 20,977.11 points. The shares of SoftBank Group and Fanuc declined by 5.01% and 3.84%, respectively.
In China, the continental benchmark Shanghai Composite dropped by 1.97% to 3,043.03 points, while Hong Kong’s index Hang Seng declined by 610.10 points, or 2.10%, to 28,503.26 points. The stocks of Tencent fell by more than 3%.
In South Korea, the index Kospi fell by 42.09 points, or 1.92%, to 2,144.86 points. The local microprocessors manufacturer SK Hynix reported a drop of 4.2%.
The Australian index S&P ASX 200 dropped by 69 points to 6,126.20 points.
European markets mid-session recap
European shares opened deep in the red on Monday but later succeeded to recover some of the loses.
The German index DAX 30 is trading with a minimum increase of 0.6 points to 11,364.79 at 10:45 GMT. The stocks of Allianz and Deutsche Bank moved slightly up by 0.3%, while SAP and BASF were on a negative trend with a decrease of 0.3% and 0.1%. The biggest loser today is Bayer, which is down by 2% after the US regulatory problems related to Monsanto takeover.
French index CAC 40 is up by 0.8 points, about 0.01%, to 5,270.74 points at mid-session trading. The shares in luxury goods group LVMH briefly fell almost 9 percent at the open on Monday before recovering in what traders said was likely a “fat finger” erroneous trade. The stocks of automaker Renault were down by 1.88%.
The British index FTSE 100 is down by 0.33% to 7,183.71 points at 10:45 GMT. The stocks of the Ashtead Group are down by 2% on the background of decreasing British pound. Meanwhile, there was more bad news from the retail sector with Majestic Wine losing just over a tenth of its value after an update on its transformation plan.
Wall Street pre-session recap
The futures on Wall Street stock indexes are trading without a single direction on Monday, but point to somehow negative start of the session.
At 07:00 am ET, the futures of Dow Jones Industrial Average are down by 27.00 points, which indicates for slightly positive opening by less 14 points. The situation with S&P 500 is similar, where the futures indicate for the positive start of 0.5 points. Only the technology index Nasdaq Composite is into the red with futures pointing a negative start by 18.56 points.
Meanwhile, Chicago Federal Reserve Bank President Charles Evans said on Monday it was understandable for markets to be nervous when the yield curve flattened, though he was still confident about the US economic growth outlook.