Global stocks mixed amid economy worries

Joe McDonald

BEIJING (AP) – Global stocks were mixed yesterday after Wall Street fell on jitters about the global economy.

London and Tokyo retreated while Paris opened higher and Hong Kong advanced. German and Chinese markets were closed for holidays.

Investors were rattled by data showing United States (US) manufacturing and hiring in September were weaker than expected.

“The overall health of the US economy could be described as anemic at best,” said Edward Moya of Oanda in a report.

London’s FTSE 100 opened down 0.2 per cent at 7,104.69 while France’s CAC 40 gained 0.8 per cent to 5,466.17.

On Wall Street, the future for the benchmark Standard & Poor’s 500 index gained 0.4 per cent while that for the Dow Jones Industrial Average rose 0.3 per cent.

In Asia, Tokyo’s Nikkei 225 fell by an unusually wide margin of two per cent to 21,341.74 while Hong Kong’s Hang Seng ended up 0.3 per cent at 26,110.31.

Sydney’s S&P-ASX 200 shed 2.2 per cent to 6,493.00 and India’s Sensex gave up 0.6 per cent to 38,082.82. Benchmarks in Taiwan, New Zealand and Southeast Asia also retreated.

On Wednesday, the S&P 500 lost 1.8 per cent after a survey by payroll processor ADP found hiring weakened in September.Investors saw signs the US economy is “possibly on the verge of a recession,” said Stephen Innes of AxiTrader in a report.

A woman walks past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

That added to concern about earlier data that showed US manufacturing shrank last month by its widest margin in a decade.

Also on Wednesday, the World Trade Organization (WTO) cleared the US to impose tariffs on up to USD7.5 billion of European goods to compensate for illegal subsidies given to aircraft manufacturer Airbus.

The Trump administration said tariffs would begin October 18.

A separate WTO ruling found Airbus rival Boeing Co received similar improper aid from Washington. The European Union (EU) is expected to rule next year on possible tariffs Europe can impose in response to that.

Markets already were on edge about whether US President Donald Trump’s tariff battle with Beijing, which is weighing on trade worldwide, might tip the global economy into recession.

US and Chinese negotiators are due to meet this month for a 13th round of talks aimed at ending the fight over Beijing’s trade surplus and technology policies. The two sides have made conciliatory gestures including postponing or lifting some punitive tariffs, but there has been no sign of progress toward settling the core issues in the dispute.

Investors increased their bets the Federal Reserve will slash interest rates at its next meeting to shield the economy from slowing growth abroad and the effects of the trade war.

Markets are pricing in a 75 per cent probability the Fed will cut short-term rates by half a percentage point at its October 29-30 meeting. The Fed hasn’t cut rates by that large a margin since the 2008 financial crisis.

ENERGY: Benchmark US crude gained 14 cents to USD52.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged 98 cents on Wednesday to close at USD52.64. Brent crude, used to price international oils, added 10 cents to USD57.79 per barrel in London. It fell USD1.20 the previous session to USD57.69.

CURRENCY: The dollar declined to 107.10 yen from Wednesday’s 107.19 yen. The euro was unchanged at USD1.0961.