Slow growth concerns in China and rising US interest rates weighed on European stock markets on Tuesday, catching up with losses in Asia and on Wall Street.
London’s benchmark FTSE 100 index was down 0.4 percent as it approached the halfway point in trading for the first time since Thursday.
The eurozone’s losses were more severe, with the DAX index in Frankfurt and the CAC 40 in Paris both losing around 1% following a long weekend.
“Despite the public holiday in most of Europe yesterday, this is shaping up to be another volatile and eventful week for global markets,” noted Lukman Otunuga, senior research analyst at FXTM.
“Later today, the International Monetary Fund will release its updated global economic outlook with markets expecting a downgrade for growth this year.”
Otunuga said, “such a development may hit investor confidence, sweetening appetite for safe-haven assets”.
One traditional haven, the yen, struck a fresh 20-year low Tuesday at 128 to the dollar, with the Japanese currency heavily weighed down by diverging monetary policy in Japan and the United States.
According to analysts, the high oil prices in Japan, a large crude importer, have pushed the yen lower.
The Nikkei 225 index of Japan recovered from Monday’s losses and led other major Asian stock markets higher.
However, Hong Kong’s stock fell by the most in three weeks, weighed down by fears over Beijing’s strict tech-sector rules and China’s slowing economic development.
Millions of people in Shanghai, China’s financial center, are still confined to their houses.
Investors were left to wonder if Chinese authorities’ efforts to boost the economy – which have resisted decreasing interest rates – will be enough to counteract Beijing’s zero-Covid policies.
“The focus in Asia is on mainland policy easing to cushion the impact of lockdowns,” said Stephen Innes at SPI Asset Management.
China’s economic growth accelerated in the first quarter of the year to 4.8 percent, official data showed Monday, but the government warned of “significant challenges” ahead.
London – FTSE 100: DOWN 0.4 percent at 7,586.79 points
Frankfurt – DAX: DOWN 0.9 percent at 14,036.68
Paris – CAC 40: DOWN 1.0 percent at 6,523.90
EURO STOXX 50: DOWN 1.1 percent at 3,807.47
Tokyo – Nikkei 225: UP 0.69 percent at 26,985.09 (close)
Shanghai – Composite: DOWN 0.05 percent at 3,194.03 (close)
Hong Kong – Hang Seng Index: DOWN 2.28 percent at 21,027.76 (close)
New York – Dow: DOWN 0.1 percent at 34,411.69 (close)
Dollar/yen: UP at 128.21 yen from 126.54 yen
Euro/dollar: DOWN at $1.0793 from $1.0802
Pound/dollar: FLAT at $1.3023
Euro/pound: FLAT at 82.87 pence
Brent North Sea crude: DOWN 1.3 percent at $111.68 per barrel
West Texas Intermediate: DOWN 1.6 percent at $106.49 per barrel
