Global Stocks Fall on Growth Concerns in China

On Monday, Global stock markets fell on growth concerns after data from China pointed to the world’s second-largest economy a shock contraction with imports falling 7.6 percent and exports dropped 4.4 percent.

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Analysts had predicted a 5 percent rise in imports and a 3 percent gain in exports but exports dropped 4.4 percent fueling worries of growing concerns of the impact of the U.S. – China trade war on growth worldwide. Talks between the U.S. and China have shown no signs of substantial progress after talks for months to resolve the trade war.

Analysts at Citi said that there is a high probability that an agreement will be reached by both sides, but the effects of the trade disruption have already rippled through the global economy.

Group chief economist at Capital Economics, Neil Shearing said in a note to clients that data for the preceding months showed strong exports to the U.S with a decent pace of growth, China’s trade data for December was soft.

Europe posted their largest fall in three years with weak industrial output numbers adding to the gloom.

The S&P 500 index fell 0.4 percent.

The Nasdaq Composite index declined 0.7 percent.

Europe 600 index, STOXX slipped 0.5 percent.

Germany DAX fell half a percent and France CAC slipped 0.9 percent with the biggest decliners of shares in European luxury goods and the automotive sector.

On Asia’s MSCI index of Asia-Pacific ex-Japan shares fell almost 1 percent with Chinese and Hong Kong shares the worst hit.

Commodity markets were also impacted with West Texas Intermediate crude slipping 0.7 percent at $51.24 a barrel. Industrial metals copper and aluminum also losing ground, gold increased 0.1 percent to $1.290.70 an ounce.

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Currency Markets

The dollar index which is measured against a basket of major currencies fell 0.1 percent to 95.558.
The Australian and New Zealand dollar fell 0.3 percent.

The euro gained 0.1 percent at $1.1480.

The Japanese yen gained 0.3 percent to 108.21 per dollar.

The pound sterling rose 0.2 percent at $1.2866- a seven-week high as Brexit takes the spotlight with PM Theresa May looking for support in the divorce deal when it is put to the vote on Tuesday.

Focus by investors is now on the U.S. government shutdown, which is in its 24th day with no resolution in sight.

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