LONDON (AP) – Global stock markets mostly fell Monday after disappointing manufacturing surveys in China and Europe reinforced concerns over the economic outlook. The Japanese yen continued its slide following last Friday’s surprise Bank of Japan stimulus, falling to a seven-year low against the dollar.
KEEPING SCORE: In Europe, Germany’s DAX declined 0.5 percent to 9,277 while France’s CAC-40 fell 0.5 percent to 4,214. Britain’s FTSE 100 was 0.4 percent lower at 6,521. Wall Street was poised for modest falls at the open, with both Dow futures and the broader S&P 500 futures down 0.1 percent.
MANUFACTURING MALAISE: The first trading day of a month sees a flurry of manufacturing surveys around the world, culminating with the Institute for Supply Management’s report for the U.S. Ahead of that, a gauge of Chinese manufacturing released by a government-sanctioned industry group declined 0.3 points to 50.8 on a 100-point scale on which numbers above 50 show an expansion. The consensus in the markets was a reading of 51.2 points. The unexpected weakness fed concern that growth in the world’s second-largest economy will decline further. A similar report into the manufacturing sector of the 18-nation eurozone from financial data firm Markit was similarly downbeat. Although the October eurozone index rose to 50.6 from the previous month’s 50.3, it’s not far off contraction territory.
ANALYST’S TAKE: “A raft of disappointing PMI readings from the eurozone and Asia weigh on investor sentiment,” said Craig Erlam, market analyst at Alpari.
BUSY WEEK AHEAD: The manufacturing reports kick off what’s likely to be a busy week in the financial markets, with the European Central Bank meeting on Thursday to decide whether it will sanction further measures to stimulate the ailing eurozone economy. Friday sees the U.S. nonfarm payrolls report for October – figures that often set the market tone for a week or two after their release. Now that the Federal Reserve has completed its latest stimulus, investors are assessing when the Fed will start to raise interest rates.