Poor start to Q2 for global stocks
Stock markets around the world slumped Friday on the first day of the second quarter, with investors rattled over new economic concerns in Japan and as solid US jobs data failed to boost sentiment.
Tokyo spearheaded losses across most of Asia as a key survey showed confidence at Japan’s manufacturers slumped to a three-year low, AFP reported.
Then data that the US economy added 215,000 jobs in March, slightly more than the 200,000 projected by analysts, failed to boost sentiment.
Despite the still-healthy pace of hiring, the jobless rate rose a tenth point to 5.0 percent as a growing number of people entered the jobs market.
The data, a vital snapshot of the strength of world’s biggest economy that investors use to interpret the path of Federal Reserve interest rates, did not give the US dollar a lasting boost and Wall Street opened on the downside, AFP added.
Meanwhile in Europe, Frankfurt and Paris stock markets were down around 2.5 percent in afternoon trading.
Stocks soared Wednesday after Federal Reserve chief Janet Yellen indicated that the US central bank was unlikely to raise interest rates in the first half of this year, citing ongoing concerns about the slow global economic growth.
The Bank of Japan’s quarterly Tankan report of 10,000 firms showed sentiment plunged in January-March to plus six from 12. The survey marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable. Forecasts had been for a reading of plus eight.
The figures are the worst since Prime Minister Shinzo Abe put his growth drive fully into action in 2013 and will ramp up pressure on him as the economy struggles to gain traction.
Analysts also said the figures will likely push the central bank to unveil another round of monetary easing measures, on top of the huge bond-buying scheme already under way and after an unprecedented move to negative interest rates.
Tokyo’s Nikkei index dived 3.6 percent, with a stronger yen also hitting exporters.
There were sharp losses across Asia, with Hong Kong down 1.3 percent and Sydney 1.6 percent lower at the close. Seoul, Singapore and Wellington were also heavily sold off.
However, Shanghai ended the day with a 0.2-percent gain thanks to end-of-day buying ahead of a long holiday weekend.
A surprise jump in a gauge of Chinese manufacturing helped Shanghai post a slender gain although investors were jolted by news that Standard & Poor’s had lowered its credit rating outlook on China to negative, reported AFP.