A raft of gloomy economic and services data showing a global lack of growth or recovery and persistent fears over the European sovereign debt crisis has pulled EU and Asia equity markets down Monday. US markets remain closed for the Labor Day holiday.
UK’s FTSE100 slipped down 3%, while France’s CAC 40 and Germany’s DAX went under 4%. In Asia, Japan’s Nikkei 225, Hong Kong’s Hang Seng, China’s Shanghai Index all travelled lower, by up to –3%. Gold, however, made modest gains, reaching $1,893.
The Markit/CIPS services purchasing managers' index (PMI) in the UK recorded its second largest fall by tumbling to 51.1 in August, from 55.4 in July. Economists said that slower growth for UK new businesses and continued economic uncertainty are to blame for the number.
This follows UK manufacturing data released last week that showed the fastest pace of contraction in more than two years.
Meanwhile, US employment data released on Friday fuelled fears of the US slipping back into a recession as US non-farm payrolls data for August showed zero jobs being created on the month.
“Collectors of trivia will note this was the first month there had been a zero monthly change in payrolls since February 1945, though it is premature to celebrate such a record since the latest data will almost certainly be revised,” says Stephen Lewis, chief economist at Monument Securities.