Global stocks fell on Monday after a series of Chinese economic indicators showed an unexpected sharp collapse in the global growth engine, just as the world seeks to limit the spread of the delta version of Covid-19 with vaccines.
The 10-day winning streak in European stocks was halted, with declines led by commodity-sensitive stocks. China-. The pan-European STOXX 600 index is down 0.5%, well off last week’s record levels.
China’s July retail sales, industrial production, and urban investment figures missed expectations, a trend that could worsen given the recent tightening of coronavirus restrictions there.
“Data for July was negatively impacted by massive flooding in China during that period, as well as movement restrictions domestically and at major export ports to limit the stubborn emergence of the delta variant, albeit in smaller numbers,” said Jeffrey Haley, chief markets analyst at Oanda.
“The latter is getting on the nerves of investors now, especially when you look at the evolution of the outbreak in the region from Australia to Singapore to Japan and everywhere in between. If anyone can break that trend it is. China“he added.
Msci’s global stock index, which includes stocks from 49 countries, was down 0.3%. US stock futures were also lower, with futures for the S&P 500 E-minis and Nasdaq down 0.3%.
Leading Chinese stocks cut losses and closed 0.1% lower, while Japan’s Nikkei index lost 1.7%, although economic growth beat expectations for the quarter ending in June.
Wall Street hit new records last week, even as a poll showed US consumer confidence slumping to its lowest level since 2011 amid delta divergence fears.
The unexpected report and the Chinese slowdown combined to push the yield on US 10-year Treasuries to 1.25%, down 11 basis points in just two sessions.
The general risk-free environment also helped boost the Dollar, which rose 0.1% and returned to business at 92,629 units.
In the commodity markets, gold fell to $1,771 an ounce, while crude oil prices lost nearly $2 due to concerns about travel restrictions caused by the coronavirus that could hurt demand, especially in China.
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