GLOBAL MARKETS-European shares fall after China data adds to growth woes

European stock indexes opened lower on Monday, after oil prices slid and riskier currencies took a hit during the Asian session as unexpectedly weak economic data from China highlighted fears about a slowdown in growth.

European stock indexes opened lower on Monday after oil prices slid and riskier currencies took a hit during the Asian session as unexpectedly weak economic data from China highlighted fears about a slowdown in growth. China's April retail sales plunged 11.1% on the year, almost twice the fall forecast, as full of partial COVID-19 lockdowns were imposed in dozens of cities. Industrial output dropped 2.9% when analysts looked for a slight increase.

Investors are worried that inflation pushing up interest rates will damage the global economy. These fears saw global shares hit their lowest point in 18 months last week. At 0732 GMT, the MSCI world equity index, which tracks shares in 50 countries, was flat on the day, but still holding above last week's lows.

Europe's STOXX 600 was down 0.5% while London's FTSE 100 was down 0.4%. "This week’s events calendar is relatively quiet, so markets are more than ever at the mercy of headlines related to the global growth outlook," wrote ING rates strategists in a note to clients.

"Despite gloomy risk sentiment already, we think investors have shown that their focus is increasingly on recession risk." European government bond yields were a touch higher, with Germany's 10-year yield up 3 basis points at around 0.974% - below the roughly eight-year high of 1.19% it reached last Monday.

The European Central Bank will likely decide at its next meeting to end its stimulus program in July and raise interest rates "very soon" after that, ECB policymaker Pablo Hernández de Cos said on Saturday. SAFE HAVENS

ING analysts said the economic growth concerns could allow government bonds to function as safe-havens. "It would take a lot of optimism for 10Y Treasuries and Bund to test 3% and 1% to the upside in our view," they said.

At 0741 GMT, the U.S. 10-year yield was at 2.9221%. The dollar index, which last week surged to a 20-year high of 105.01, was down less than 0.1% on the day at 104.47. Riskier currencies such as the Australian dollar and the British pound fell.

The euro was near its lowest since 2017. ECB policymaker Francois Villeroy de Galhau said the euro's weakness could threaten the central bank's efforts to steer inflation towards its target. UK labor market data is due on Tuesday and UK inflation data will be out on Wednesday.

Sky-high inflation and rising interest rates drove U.S. consumer confidence to sink to an 11-year low in early May and raised the stakes for April retail sales due on Tuesday. Oil prices slipped as investors took profit from a recovery in the previous session.

Brent crude futures were down 1.2%, at $110.26 a barrel at 0755 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures were 0.8%, lower at $109.59 a barrel. Bitcoin was trading at around $29,532. Last week it plunged to as low as $25,401.05 - its lowest since December 2020. Already hurt by declining risk appetite, cryptocurrencies sold off last week when a popular stablecoin, TerraUSD, collapsed and lost its dollar peg.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)