Stocks fall as PMI surveys disappoint, oil gains more than 1%
European stock markets opened lower as surveys of purchasing managers from France, Germany, and the euro zone came in weaker than expected. The pan-European STOXX 600 index was down 0.9%. [.EU]
Euro zone business growth has stalled this month, a survey showed on Monday, less than two weeks after outgoing ECB President Mario Draghi pledged indefinite stimulus to revive the bloc’s ailing economy.
The euro fell 0.4% to $1.0966 after the German Purchasing Managers’ Index (PMI) release, its lowest in over a week against the dollar. [FRX/]
Germany’s DAX index hit its lowest level in nearly two weeks, down 1.35% after the euro zone data, while France’s CAC 40 fell nearly 1%.
The MSCI All Country World Index, which tracks shares across 47 countries was down 0.25%.
Oil prices rose on doubts about how fast Saudi Arabia can restore full crude output after an attack earlier this month on its largest processing facility.
Brent crude futures — the international benchmark for oil — rose to as much as $65.50 per barrel, a gain of over 1%. They last traded half a percent higher at $64.59. [O/R]
“Considering that Germany already contracted in Q2, today’s numbers effectively increase the risk of another negative quarter in Q3, which by definition would constitute a technical recession,” said Marios Hadjikyriacos, investment analyst at XM.
“It seems that the malaise in manufacturing — owed to trade and Brexit worries — has started to spread to the much larger services sector as well.”
Most Asian share markets slipped as investors waited for more clarity on U.S.- China trade talks.
Market sentiment was fragile, with civil unrest in Hong Kong and worries a trade deal between the United States and China could take a long time to materialize. Moves were further exaggerated by low volumes as Japanese markets were shut for a public holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.2% at 510.04 points. It is still up more than 3% so far in September.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid
U.S. stock futures — earlier up 0.4% — sank after the PMI data in Europe. S&P 500 E-mini futures were last down 0.2%.
