Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Global markets slump as China's exports slow

Global markets slump as China's exports slow

Shares in Europe and the US slumped lower on Monday, with Britain's FTSE 100 reversing earlier gains as investors fretted about weak export growth in China.

The UK blue chip index lurched from a high of 6,757 all the way down to 6,671, while the US S&P 500 and Europe's STOXX 50 list of eurozone blue chips both fell around 0.6%, with all the ingredients in place for investors to push shares towards a third consecutive week lower.

China reported that exports sank 18% in February, while net new bank lending in the world’s second largest economy more than halved last month.

There was more sentiment-sapping news from Asia as Japan’s fourth quarter GDP was revised down from a preliminary estimate of 1.0% to 0.7%.

All of that comes after Friday’s report showing that 175,000 new jobs were created in the US in February, more than expected. The US labour market strength came despite the cold snap and snowstorms and was seen as supporting Federal Reserve's current pace of stimulus 'tapering'.

Meanwhile, Russia has tightened its control over Crimea as intentional leaders continue in their attempts to convince president Vladimir Putin to pull back from the region.

Amid all of the bad news, emerging markets shares were particularly hard hit, with the MSCI Emerging Markets index down 1.3%. Asian shares had fallen sharply overnight.

Signs of a slowdown in China were also enough to knock the price of oil, with Brent crude futures trading down 0.6% at $108.04 per barrel.

In London, the weak data saw mining shares fell, with Fresnillo, Anglo American and Glencore Xstrata all off around 3%. At the other end of the index, Rolls Royce pared back earlier gains to trade up nearly 1% at £10.34 after Daimler AG on Friday evening announced its intention to sell its 50% stake in Rolls-Royce Power Systems to Rolls-Royce, exercising a put option.

The British pound fell 0.5% to $1.6626 as Bank of England deputy governor Charlie Bean talked the currency down, saying any further sterling appreciation 'would not be particularly helpful in terms of facilitating a rebalancing towards net exports.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter