LONDON: European and Asian stock markets slid Friday on reinforced concerns about the global growth outlook after data showed the US economy has expanded at its slowest pace for two years.
Fresh data out of the United States further dampened sentiment as consumer spending came in at a lower than expected increase of 0.1 per cent in March despite personal income rising by 0.4 per cent, while annual consumer inflation slid to 0.8 per cent in March.
It also comes in a week during which the Bank of Japan decided against boosting stimulus to support its country’s own flagging economy.
Around 1330 GMT, Europe’s main stock markets were lower, despite official data Friday showing that growth in the Eurozone strengthened far beyond expectations in the first quarter, as traders focused on deflation worries across the single currency bloc.
“With a weak lead from US markets in which the Dow Jones fell one per cent (Thursday) for the first time in two months ... European markets dropped” heading into the weekend break, said Jasper Lawler, analyst at trading group CMC Markets.
Meanwhile, analysts at Wells Fargo said the main US indices opened on Friday “modestly lower on the final trading day of April following this morning’s economic data releases”.
The US Commerce Department said Thursday that the world’s number one economy grew 0.5 per cent in January-March, almost half the pace expected, and the worst reading since 2014 as consumer spending sputtered.
The news seemed to justify the Federal Reserve’s decision earlier this week not to raise interest rates and to lower its expectations for any more hikes this year.
Also this week, the Bank of Japan held fire on monetary policy despite slack Japanese growth, falling prices and a deadly earthquake that caused the closure of factories.
Among large European movers was Sanofi, whose shares slumped 4.9 per cent in afternoon trading after US biotech company Medivation rejected an unsolicited $9.3 billion bid from the French pharmaceutical maker.
In the United States, online giant Amazon jumped 10.1 per cent after reporting a swing into profit from a year ago for the first quarter to $513 million, racking up a fourth consecutive profitable quarter.
