Stock markets across the world started 2019 under heavy pressure as deepening concern about a global economic slowdown spooked investors, still shaken by the worst December for equities in a decade. Haven assets rose, lifting gold, taking Japan’s yen to its strongest level in three months and pushing German Bund yields sharply lower.
Wednesday’s declines for equities were most acute in Hong Kong, after economic data showed a contraction for China’s manufacturing sector for the first time in 19 months. The Hang Seng closed down 2.8 percent its biggest single-session fall since October. On the mainland, the CSI 300 fell 1.4 percent. “Evidence of the damage of the trade war is increasing,” said Karen Ward, chief market strategist for Europe, Middle East and Africa at JPMorgan Asset Management.
“Investors are still not convinced there are meaningful grounds for compromise between Washington and Beijing. The market now wants to know that there will be a concrete agreement which can stop the downturn in business sentiment before firms start to materially cut back on investment and hiring.” European markets followed. A broad retreat took the region-wide Stoxx 600 down 1.7 per cent, setting it back toward the two-year lows it touched in December.
Wall Street was also poised to resume its slide, with futures for the Nasdaq 100 off 1.5 per cent and those for the S&P 500 1.3 per cent lower. The bleak list of risk factors faced by investors included the trade war between Beijing and Washington, the US federal government shutdown and the prospect of a disorderly Brexit. They all loom over markets as central banks tighten monetary policy, e