European stocks sink fast as Wall Street falters
Advert

European stocks sink fast as Wall Street falters

Losses in eurozone stock markets accelerated yesterday as a pessimistic economic growth outlook dampened sentiment and US markets opened firmly in the red.

"Yet more bad news reinforces the impression that the eurozone is headed steadily into recession territory," noted IG analyst Chris Beauchamp.

The EU Commission, the bloc's executive arm, said it now expects growth of 1.3 per cent in the eurozone this year, a significant cut from the 1.9 per cent it predicted only last November.

It said Europe is facing international headwinds - including Brexit fears, Italian economic woes and the global trade war - which have now taken the steam out of a post-crisis recovery in the eurozone.

“That eurozone growth downgrade (is) not helping matters, but after their recent surge markets seem quite vulnerable to an outbreak of bad news," Beauchamp told AFP.

London stocks, although also lower, outperformed their peers after the Bank of England left interest rates unchanged and warned of Brexit uncertainties.

"The event got off to quite a shaky start as the central bank released its latest forecasts showing GDP growth this year suffered its biggest downward revision since August 2016," said Craig Erlam, senior market analyst at Oanda.

"Despite that rocky start, the pound gradually recovered throughout the press conference to trade flat on the day against the dollar, having been down by more than half a per cent at one point," he said.

Britain and the EU, meanwhile, agreed yesterday to hold more talks to try to avoid a no-deal Brexit, after a "robust" meeting between Prime Minister Theresa May and European Commission chief Jean-Claude Juncker.

A joint statement issued after the talks in Brussels said Juncker had again warned that November's withdrawal agreement could not be renegotiated.

On Wall Street, the Dow Jones index fell at the opening amid widespread profit-taking after recent gains, and as Twitter shares fell sharply after the company reported earnings.

"Also, economic concerns across the pond appear to be hamstringing sentiment, courtesy of another dose of disappointing German data and as the Bank of England cut its economic outlook after leaving its monetary policy stance on hold due to the 'fog of Brexit'," analysts at the Charles Schwab brokerages said.

In Asia earlier, stocks mostly rose as regional investors began to return from their Lunar New Year break, though Tokyo edged lower after Wednesday's negative lead from Wall Street.

Most trading floors have re-opened but business remains light, with Hong Kong and Shanghai still closed, while focus turns on the resumption next week of China-US trade talks in Beijing.

Comments not loading? We recommend using Google Chrome or Mozilla Firefox with javascript turned on.
Comments powered by Disqus  
Advert
Advert