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Global Markets - Weak China trade hits stocks, prompts risk-off trade

Reuters  |  NEW YORK 

By Caroline Valetkevitch

(Reuters) - World stock indexes fell on Monday after a shock contraction in Chinese trade reignited fears of a sharper slowdown in global growth and caused investors to sell riskier assets.

Copper and other commodity prices fell and the Australian and New Zealand dollars also declined following the news, which added to worries that U.S. tariffs on Chinese goods were taking a toll on the world's second-largest The yen rose against the dollar.

"The biggest theme (in the market today) is risk-off," said John Doyle, vice of dealing and trading at Tempus, Inc.

Data from showed imports fell 7.6 percent year-on-year in December while analysts had predicted a 5-percent rise. dropped 4.4 percent, confounding expectations for a 3-percent gain.

For an interactive version of the following chart, click here

The and - the world's two largest economies - have been in talks for months to try to resolve their bitter trade war, with no signs of substantial progress.

Adding to the gloom were weak industrial output numbers from the euro zone, which showed the largest fall in nearly three years.

Softening demand has been felt around the world with sales of goods ranging from iPhones to automobiles slowing, prompting profit warnings from among others.

Trade-sensitive shares fell, including Boeing Co , though U.S. stock investors also were on edge as the U.S. earnings season kicked off.

"We're seeing some cautiousness heading into the beginning of earnings season as people are worried about guidance and what companies are going to say, especially in relation to trade," said Robert Pavlik, at in

The Dow Jones Industrial Average <.DJI> fell 71.09 points, or 0.3 percent, to 23,924.86, the S&P 500 <.SPX> lost 11.3 points, or 0.44 percent, to 2,584.96 and the Nasdaq Composite <.IXIC> dropped 46.93 points, or 0.67 percent, to 6,924.55.

shares were higher after the estimates as lower expenses offset a drop in quarterly revenue.

The pan-European STOXX 600 index <.STOXX> lost 0.48 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.44 percent.

yields turned higher on Monday, after trading mostly lower, as risk sentiment improved after said he was not looking to declare a national emergency amid a partial government shutdown.

In the foreign exchange market, the Japanese yen , a safe-haven that benefits in times of geopolitical turmoil, rose against the U.S. dollar.

The , which was down 0.24 percent, and kiwi dollar , which was down 0.12 percent. China is Australia's largest trade partner.


The prospect of slowing global growth also roiled some commodity markets. Industrial metals copper and aluminium lost ground in and

Three-month copper on Metal Exchange was bid down 0.9 percent at $5,888 a tonne after failing to trade in official rings, its lowest level in more than a week.

were down about 1 percent on the global slowdown concerns.

Brent crude futures fell 61 cents to $59.87 a barrel, trading as low as $59.27 intraday. U.S. Intermediate (WTI) crude futures fell 36 cents to $51.23 a barrel, after sinking to a session low earlier of $50.43.

(Additional reporting by in and Medha Singh and Karin Strohecker; Editing by and Nick Zieminski)

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

First Published: Mon, January 14 2019. 23:50 IST