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TEHRAN, October 08 -European markets fell on Monday as investor confidence took a knock from last week’s spike in Treasury yields and from a Chinese market slump brought on by concern that an escalating trade war with the United States could curb China’s growth.
TEHRAN, Young Journalists Club (YJC) -European markets fell on Monday as investor confidence took a knock from last week’s spike in Treasury yields and from a Chinese market slump brought on by concern that an escalating trade war with the United States could curb China’s growth.
Chinese markets re-opened after a week’s holiday, and stocks recorded their biggest one-day drop since February, with the Shanghai-Shenzhen CSI300 down more than 4 percent for only the second time in more than 2 1/2 years.
This helped set the tone for the European open and stock markets fell with the pan-European index down 0.8 percent and Germany’s DAX 0.8 percent lower.
The MSCI world equity index, which tracks shares in 47 countries, fell 0.35 percent.
The fall in global equities boosted demand for the dollar as investors rushed for safety. Against a basket of its rivals the U.S. currency rose 0.3 percent, edging towards a 14-month high hit in mid-August.
Investor fears of higher U.S. interest rates, global protectionism, emerging market weakness and an Italian budget row have all combined to send equities sharply into the red in October, with world stocks down more than 2 percent already.
“Europe is stuck between China and the US, it is feeling the heat from draining dollar liquidity and the continued anti-trade rhetoric,” said Talib Sheikh, manager of the Jupiter Flexible Income Fund.
“We don’t think this is a dip to be buying across the eurozone. Nothing there looks desperately appealing, and if the macro headwinds don’t look to abate, further cheapening of valuations looks to be warranted.”
The dark mood in China sent shivers across Asian markets and will add to investors nervousness — the MSCI benchmark emerging markets equity index dropped 0.8 percent to its lowest level since May 2017 and is now down 5.5 percent in October, the biggest monthly loss since January 2016.
Source: Reuters
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