Global shares stumble following retreat on Wall Street

Elaine Kurtenbach, The Associated Press</span>
Published Sunday, March 24, 2019 11:45PM EDT
Last Updated Monday, March 25, 2019 7:42AM EDT

BANGKOK -- 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 per cent to 11,326.00 and the FTSE 100 in Britain lost 0.4 per cent to 7,178.04. The CAC 40 in France declined 0.6 per cent to 5,237.30. Wall Street looked poised to extend losses, with the future contract for the Dow Jones Industrial Average down 0.4 per cent to 25,471.00. The Standard & Poor's 500 future contract also lost 0.4 per cent, to 2,798.70.

The declines started in Asia, where Japan's Nikkei 225 stock index skidded 3.0 per cent to 20,977.11, while the Shanghai Composite index dropped 2.0 per cent to 3,043.03. The Hang Seng in Hong Kong lost 2.0 per cent to 28,523.35.

Thailand's SET dropped 0.9 per cent after a military-backed party prevailed in the country's first election since a 2014 coup, after tilting the electoral system in its favour. 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 per cent to 2,144.86 and Australia's S&P ASX 200 gave up 1.1 per cent to 6,126.20. Shares fell in Taiwan and Southeast Asia. India's Sensex lost 1.2 per cent 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 per cent in pre-trading hours Monday, up from 2.43 per cent from 2.54 per cent 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 per cent to settle at $59.04 a barrel on Friday. Brent crude shed 23 cents to $66.80 per barrel. It fell 1.2 per cent 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.

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