LONDON: Stock markets were sharply lower Wednesday after worse-than-expected US data revived worries about the impact of the trade war on the global economy.
Asian markets were weaker overnight and Europe tumbled, with London shedding more than 2.4 per cent as investors took flight on news that US manufacturing activity fell to its lowest level since June 2009.
New York opened down as a result, with the Dow and the high-tech Nasdaq off nearly one per cent each after a report showing hiring slowed sharply in September while a blockbuster increase originally reported for August was also revised down.
The data showed “the job market has shown signs of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
The jobs data came ahead of an all-important government employment report due out Friday as dealers look for signals on the US Federal Reserve’s interest rate plans, while the corporate earning season is also about to get underway.
The Institute for Supply Management (ISM) pointed to trade conflicts as the biggest headwind facing the US economy.
“Equities are in full retreat,” said Chris Beauchamp, chief market analyst at financial spread-betting firm IG.
“The risk-off atmosphere created by yesterday’s US ISM miss continues to hang over markets.
“European equities have turned firmly lower in early trading on the very reasonable assumption that, if things are that bad for the US, then they must be even worse for Europe.”
The ISM data pointed to the impact of the China-US trade war and could put pressure on US President Donald Trump to push through an agreement with Beijing. Top-level talks are planned for later this month.
Adding to the selling pressure in Asia were long-running concerns about the impact of increasingly violent pro-democracy protests in Hong Kong that saw a demonstrator shot and wounded by police on Tuesday.
Hong Kong stocks fell 0.2 per cent — though off earlier steep losses — as investors returned from a public holiday to mark China’s National Day which saw some of the worst violence in the city since protests began in June.
Tokyo ended 0.5 per cent lower, Sydney fell 1.5 per cent and Singapore lost 1.2 per cent. Shanghai was closed for a holiday.
Seoul shed almost two per cent after North Korea fired a missile into the sea just a day after Pyongyang said it would resume stalled nuclear talks this week.
The British pound was meanwhile pressured against the dollar as Prime Minister Boris Johnson prepared to submit his final offer for a new Brexit deal to Brussels.
Johnson said his deal was a compromise and urged the EU to meet him halfway but also warned he was prepared to take Britain out of the bloc on October 31 if they did not.