European stock markets fall on China data and Brexit
European stock markets opened lower on Monday after data showed Chinese imports and exports falling and new doubts emerged over a Brexit deal.
Germany’s Dax index led Europe downwards, falling 0.6 per cent by 9.30am UK time, while the pan-European Euronext 100 had fallen 0.7 per cent.
Britain’s FTSE 100 was 0.4 per cent lower, helped somewhat by a fall in the pound due to comments from the UK and the European Union that there was more work to do before a deal can be reached.
Investors were also absorbing data from China that showed the world’s second-biggest economy suffering under the weight of its trade war with the US. Exports and imports fell by more than expected in September as tariffs took their toll.
The fall in European markets came despite Asian and US stocks rising overnight and yesterday. Investors had been cheered by US President Donald Trump on Friday suspending a tariff hike and hinting a deal was close.
Yet weak data today overclouded the trade war developments by reminding traders of the weakness of the global economy.
British banks were among the biggest fallers on the FTSE 100, with Lloyds and RBS each dropping over three per cent.
They had been “bid up to the nines on Friday because of hopes of a deal,” said Neil Wilson, chief market analyst at online trader Markets.com. “The euphoria of Friday turned into a bit more of a cold Monday morning in October,” he said.
Multiple large companies from around the world are due to report earnings this week, including some of the biggest US banks.
“Markets will now have to see whether corporate earnings are as nasty as some fear,” Wilson said. “Higher input costs, rising wages, lower interest rates, tariffs and a synchronised global economic slowdown are all factors likely to weigh not just on the third quarter scorecards.”
(Image credit: Getty)