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Global Markets: Weak China trade hits world stocks, causes risk-off trade

Reuters  |  NEW YORK 

By Caroline Valetkevitch

(Reuters) - World stock indexes fell while the yen rose against the dollar 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 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 biggest theme (in the market today) is risk-off," said John Doyle, 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 and 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 Caterpillar Inc, 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 fell 139.63 points, or 0.58 percent, to 23,856.32, the S&P 500 lost 16.99 points, or 0.65 percent, to 2,579.27 and the Nasdaq Composite dropped 63.27 points, or 0.91 percent, to 6,908.21.

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

The pan-European STOXX 600 index lost 0.38 percent and MSCI's gauge of stocks across the globe shed 0.62 percent.

U.S. Treasuries tracked the European bond market, but were little changed in late-morning U.S. trading.

In the foreign exchange market, the Japanese yen, a safe-haven currency that benefits in times of geopolitical turmoil, strengthened against the U.S. dollar by 0.33 percent.

The Australian dollar, 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 slightly. U.S. crude fell 0.54 percent to $51.31 per barrel. Brent crude, the international benchmark, fell 46 cents to $60.02 a barrel.

(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. 22:07 IST