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Global stocks fell on Friday after China reported worse than expected trade data

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Global stocks fell on Friday after China reported worse than expected trade data for February.

Chinese exports plummeted 20.7% in February from a year earlier, reflecting weaker demand and distortions from the Lunar New Year holiday. That was far below expectations for a 4.8% drop.

Adding to the downbeat sentiment, preliminary data showed today that German factory orders sharply dropped in January at the fastest pace in seven months, defying expectations for further gains, mainly due to a slump in external demand. Manufacturing orders decreased a seasonally and calendar adjusted 2.6% month-on-month, while economists were looking for a modest 0.5% gain. The latest fall in orders was the worst since a 3.6 percent slump in last June.

Investors await the US payrolls data for February later in the day for further clues to the global growth outlook.

Asian markets recap

The main indexes in the Asian stock exchanges ended the last session of the week with severe declines amid weak data on Chinese exports for February.

On the Shanghai Stock Exchange, the main benchmark Shanghai Composite fell by 136.56 points, or 4.40%, to 2,969.86 points. Hong Kong’s index Hang Seng wiped out 554.75 points, ending the day at 28,224.70 points.

Shanghai composite

The negative performance of the Chinese indexes was triggered by Chinese export data for February, which reported a 20.7% contraction due to the celebration of the Lunar New Year, as well as the impact of the trade war with the United States. The Chinese exports totaled 135.2 billion USD after declining by more than expected in the same month earlier. Chinese imports fell by 5.2% year-on-year in February to 131.1 billion USD. The overall decline in foreign trade was 13.8% YoY to 266.4 billion USD.

On the Tokyo Stock Exchange, the blue-chip index Nikkei 225 wiped out 430.45 points, or 2.01%, ending the session at 21,025.26 points, reaching its lowest level in three weeks.

Earlier today, Reuters reported that the Japanese economy grew faster-than-expected in the fourth quarter, as capital spending led to a faster recovery from a number of natural disasters in the previous quarter. Japan’s Gross Domestic Product rose by 1.9% YoY in the October-December period against a 1.4% estimate at the first reading of the data. For comparison, analysts’ consensus forecast was for a 1.8% growth. However, in the third quarter, a decline of 2.4% was reported on an annual basis, which is the biggest contraction of the economy in four years.

The shares of Fast Retailing and SoftBank Group declined by 2.25% and 1.95%, respectively.

In South Korea, Kospi declined 1.31% to 2,137.44 points with Hyundai Motor stocks decreasing by 4.38%.

At the same time, Australian S&P ASX 200 fell by 0.96% to 6,203.80 points, driven by the weak performance of financial sector companies, which reported a 1.58% drop in their share.

The focus of investors in the Asia-Pacific region was also the news of the European Central Bank’s (ECB) decision to leave key interest rates low for longer while giving a new round of incentives. At its meeting on Thursday, the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility should remain unchanged – 0.00%, 0.25% and -0.40%, respectively.

European markets mid-session recap

German index DAX 30 is trading down with 80 points, or 0.70%, to 11,437.45 points at 10:45 GMT. The stocks of Bayer dropped by 1.6% after announcing it has submitted a marketing authorization application to the European Medicines Agency for darolutamide for the treatment of patients with non-metastatic castration-resistant prostate cancer.

DAX 30

The French benchmark CAC 40 was down by 29 points, or 0.56%, to 5.238,39 in mid-session trading. Air France-KLM Group fell over 1% despite the airline reporting a 4.1% year-over-year rise in passenger figures for February.

London’s FTSE 100 slipped again on Friday as gambling firm GVC plunged as its top executives cut stakes, while weak Chinese export data rekindled global growth fears and investors remained daunted by Europe’s central bank’s downbeat economic outlook. Struggling department store Debenhams was a bright spot on the UK indexes after Sports Direct’s Mike Ashley made a move towards running the more than 240-year-old company. The blue-chip index FTSE 100 fell by 0.96% to 7,088.54 points.

Wall Street pre-session recap

Wall Street stock index futures were lower Friday morning, amid escalating concerns about a global economic slowdown.

At around 03:20 a.m. ET, Dow futures slipped 105 points, indicating a negative open of more than 109 points. Futures on the S&P and Nasdaq were both seen slightly lower.

Market participants are likely to closely monitor a fresh round of economic data.

Nonfarm payrolls, unemployment rate and average hourly wages data for February will be released at around 8:30 a.m. ET. Housing starts and building permits figures for January are both expected to follow later in the trading day.