Global Shares Stumble on Monday 03/25 05:33
Shares tumbled in Europe and Asia on Monday after Wall Street ended last
week with a broad retreat. Thailand's benchmark dipped following a general
election that appeared likely to keep the incumbent, junta-backed prime
minister in power.
BANGKOK (AP) -- Shares tumbled in Europe and Asia on Monday after Wall
Street ended last week with a broad retreat. Thailand's benchmark dipped
following a general election that appeared likely to keep the incumbent,
junta-backed prime minister in power.
Wall Street was roiled Friday by fresh signs that global economic growth is
slowing. The jitters spurred a sell-off in stocks and sent bond yields sharply
lower, flashing warning lights for a possible recession.
Among the triggers was news that factory production in the euro currency
alliance fell at its steepest rate in about six years, according to surveys of
manufacturers' purchasing managers.
In early trading Monday, Germany's DAX dropped 0.3 percent to 11,326.00 and
the FTSE 100 in Britain lost 0.4 percent to 7,178.04. The CAC 40 in France
declined 0.6 percent to 5,237.30. Wall Street looked poised to extend losses,
with the future contract for the Dow Jones Industrial Average down 0.4 percent
to 25,471.00. The Standard & Poor's 500 future contract also lost 0.4 percent,
The declines started in Asia, where Japan's Nikkei 225 stock index skidded
3.0 percent to 20,977.11, while the Shanghai Composite index dropped 2.0
percent to 3,043.03. The Hang Seng in Hong Kong lost 2.0 percent to 28,523.35.
Thailand's SET dropped 0.9 percent after a military-backed party prevailed
in the country's first election since a 2014 coup, after tilting the electoral
system in its favor. The outcome is likely to add to nearly two decades of
political instability in Thailand.
The preliminary results raise the likelihood that Prayut Chan-ocha, will
stay on as prime minister with backing from a coalition.
"However, the transition to the new government may not be smooth," Sian
Fenner of Oxford Economics said in a commentary.
"It is unlikely that any party will win a clear majority and potential
friction between political parties and the military could lead to economic
activity being significantly disrupted," Fenner said.
Elsewhere in Asia, South Korea's Kospi shed 1.9 percent to 2,144.86 and
Australia's S&P ASX 200 gave up 1.1 percent to 6,126.20. Shares fell in Taiwan
and Southeast Asia. India's Sensex lost 1.2 percent to 37,721.87.
Worried investors have shifted money into bonds, sending yields much lower.
The yield on the 10-year Treasury was at 2.47 percent in pre-trading hours
Monday, up from 2.43 percent from 2.54 percent late Thursday, a big move.
The slide in bond yields has hurt bank stocks which, along with technology
companies, accounted for much of the broad decline in stocks. The utilities
sector was the only one to eke out a gain.
Monday's weak performances came amid a lull in news on the tariffs war
between the Beijing and Washington. China-U.S. trade talks are due to resume
Thursday in Beijing.
ENERGY: Energy futures continued their slide. Benchmark U.S. crude oil lost
19 cents to $58.85 per barrel in electronic trading on the New York Mercantile
Exchange. It lost 1.6 percent to settle at $59.04 a barrel on Friday. Brent
crude shed 23 cents to $66.80 per barrel. It fell 1.2 percent to close at
$67.03 a barrel on Friday.
CURRENCIES: The dollar rebounded against the Japanese yen, to 110.16 yen
from 109.91 yen on Friday. The euro rose to $1.1318 from $1.1303.