BEIJING (`) – Global stock markets were mixed on Tuesday after a report showing slowing growth in the services industry fueled concerns that the U.S. economy is weakening.
London, Shanghai, Paris and Hong Kong withdrew. Tokyo advanced and Wall Street futures were mixed. Oil prices fell more than $1 a barrel.
Wall Street’s benchmark S&P 500 index fell 0.2% on Monday after an industry group’s May index of activity in construction, hospitality and other services fell to a three-year low. This was at odds with hopes raised by last week’s data, which showed stronger-than-expected hiring, suggesting a potential US recession fueled by rate hikes may be a long way off.
“Weakness is emerging and that should become more apparent in the coming months,” Oanda-based Edward Moya said in a report.
In early trade, the FTSE 100 in London was down less than 0.1% to 7,594.30. The CAC 40 in Paris rose less than 0.1% to 7,201.48 and the DAX in Frankfurt rose less than 0.1% to 15,975.26.
On Wall Street, futures for the S&P 500 and Dow Jones Industrial Average were little changed.
In Asia, the Shanghai Composite Index fell 1.2% to 3,195.34 and Hong Kong’s Hang Seng fell 0.2% to 19,072.42.
Tokyo’s Nikkei 225 rose 0.9% to 32,506.78 after government data showed wages in Japan rose 1% in April from a year earlier, but growth slowed from 1.3% in the previous month.
The S&P ASX 200 in Sydney fell 1.2% to 7,129.60 after Australia’s central bank hiked interest rates by 0.25 percentage point to 4.1% and warned more hikes could follow. This comes after inflation came in at a stronger-than-expected 6.8% in the January-March quarter.
India’s Sensex slipped 0.2% to 62,653.68. New Zealand and Jakarta rose while Singapore and Bangkok fell. South Korean markets were closed for a holiday.
The majority of Wall Street stocks fell Monday after a week-long rally took Wall Street to a 10-month high.
The Dow fell 0.6% and the Nasdaq Composite slipped 0.1% after the Institute for Supply Management reported that its service industry index fell from 51.9 in April on a 100-point scale of numbers above 50 showing increasing activity fell to 50.3.
Apple fell 0.8% after unveiling a long-rumored headset designed to move its users between the virtual and real worlds. It will cost $3,500 when it releases early next year.
Traders fear that rate hikes by the Federal Reserve and central banks in Europe and Asia to cool inflation from decades-high levels will push the global economy into recession. They hope signs of a slowdown in the US economy will prompt the Fed to postpone or scale back another potential rate hike at its meeting this month.
The US government will release an update on inflation ahead of the Fed meeting next week.
Even if the Fed delays a rate hike this month, Wall Street is betting on another rate hike in July after officials review more data.
High interest rates led to three spectacular bank failures in the US and one in Switzerland, which shook the financial markets. Production also weakened.
Last week’s data showed US employers unexpectedly accelerated hiring in May as workers’ wage increases eased. This helped push Wall Street to the brink of a “bull market,” or a 20% gain in the S&P 500 from its mid-October low.
In energy markets, U.S. crude slipped $1.11 a barrel to $71.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract was up 41 cents on Monday at $72.15. Brent crude, the price basis for international oil trading, fell $1.05 to $75.66 a barrel in London. In the previous session, the price rose 58 cents to $76.71.
The dollar fell to 139.45 yen from 139.63 yen on Monday. The euro advanced to $1.0729 from $1.0715.
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