European stocks yesterday declined for the third time in four days after a report signalled that China’s manufacturing industry will contract for an eleventh month, adding to concern the global economic slowdown is deepening. US index futures and Asian shares also fell.
The Stoxx 600 dropped 0.4% to 273.72 at 9.10am in London. The equity benchmark rose 0.4% on Wednesday after the Bank of Japan joined the Federal Reserve in opting for further asset purchases to support the economy and housing starts climbed in the US.
China’s manufacturing industry will contract in September, according to the preliminary reading of a purchasing managers’ index released yesterday by HSBC Holdings plc and Markit Economics. The final number will be released on 29 September. If it confirms that activity shrank, the survey will extend its longest streak of contraction readings in its eight-year history.
Japan shares fell the most in three weeks as the yen rose and the nation’s exports declined for a third month, adding to signs of global slowdown. Stocks extended losses on China manufacturing data pointing to a contraction. The Nikkei 225 fell 1.6% while the Topix Index slid 1.4%.
China’s stocks slumped, dragging down the benchmark index to the lowest level since February 2009, after a report on manufacturing signalled a contraction and escalating tensions with Japan threatened trade.
US stock index futures pointed to a weaker open on Wall Street yesterday, after squeezing out small gains on Wednesday, helped by better-than-expected house sales data for August.
Oil fell to a six-week low after US stockpiles climbed the most since March, Chinese manufacturing shrank and Japanese exports fell, signalling fuel demand may be slowing among the world’s biggest crude users.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group.
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