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Stocks slide after gloomy data add to global economic worries

European stocks fell on Monday, while US government bonds came under pressure as traders weighed on weak economic data and the prospect of expected interest rate hikes.

The regional Stoxx Europe 600 index slipped up 3 percent before reducing its losses and trading down 1.2 percent.

The declines came after a close-up survey showed that activity in China’s manufacturing sector slowed last month at the worst rate since February 2020, when Corona virus locks hit the country’s economy.

China’s official purchasing managers’ index recorded 47.4 last month, up from 49.5 in March, according to data released over the weekend. Any figure below 50 indicates a contraction.

The report by Caixin China General Manufacturing, a private survey, also pointed to a faster slowdown in the country’s large-scale manufacturing industry. H.

Meanwhile, the S&P Global’s PMI in the Eurozone fell to a 15-month low in April, with the growth rate of production almost halting.

“Companies not only reported that ongoing component shortages were exacerbated by the Ukraine war and new closures in China, but also rising prices and growing uncertainty about the economic outlook hurt demand,” said Chris Williamson, chief business economist at S&P Global.

As a sign of global economic concerns, Brent Crude, the international oil index, fell 3% to $ 103.98 a barrel.

On Wall Street, the S&P 500 struggled to get direction after the opening bell, as did the high-tech Nasdaq Composite. This slashed trade followed declines of 3.6 percent and 4.2 percent respectively in the two stock indices in the previous session.

The fall of the NASDAQ in April as a whole reached 13.3%, which marks it The worst monthly decline Since the depths of the global financial crisis in 2008. It was the worst month for the S&P index since market movements of early 2020.

The sale of NASDAQ in recent weeks has come amid trades that have boosted their stakes on tightening the US Federal Reserve’s monetary policy to curb rising inflation, which reached 8.5% on an annual basis in March – the fastest index in 40 years. Ahead of the Fed’s long-awaited policy meeting on Wednesday, markets are pricing a particularly large interest rate hike of half a percentage point, followed by increases of the same size in the next two sessions. The current interest rate range is 0.25 to 0.5 percent.

Higher interest rates can suppress the appeal of more speculative companies, whose expected profit streams have been flattered during the epidemic by low credit costs.

The prospect of tighter monetary policy has also led investors to cut government bonds. The 10-year yield on the U.S. Treasury bill – which is considered a proxy for credit costs around the world – added 0.08 percentage points to 2.97% on Monday. Bond yields rise as their prices fall.

The dollar, which measures the dollar against a basket of six other currencies, rose 0.5 percent – after soaring to its highest point in two decades last week.

Stocks slide after gloomy data add to global economic worries Source link Stocks slide after gloomy data add to global economic worries

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