industry

DAX PLUNGES: German stock market index PLUNGES by 180 points over China and eurozone fears


The DAX nosedived by 181 points earlier today to 10,737.31, leading the losses as global markets were left rattled in a sea of red over fears for China, the world’s second-largest economy. The DAX, which is particularly sensitive to global trade tensions and the Chinese economy, later pulled back losses and was trading down 108.86 points, down 1.00 percent to 10,815.84 at around 10:30 GMT, according to Bloomberg. Elsewhere in Europe, the FTSE 100 recorded a loss of 81.71 points and was trading 1.19 percent lower. The Paris CAC 40 dropped by 69.66 points, down 1.42 percent, while the Spanish IBEX 35 had plummeted 127.60 points, a loss of 1.43 percent.

The main influencers on the market this morning were weak data from both China and the eurozone and the outlook for global economic growth.

Also denting the Europe stock market was a slump in carmaker and auto supplier industry shares, which have been plagued by tougher new emissions tests.

Retail sales in China were revealed to have slumped to their weakest pace since 2003, while industrial output rose by the least in nearly three years.

China’s November industrial output grew 5.4 percent from a year earlier and retail sales increased 8.1 percent, missing forecasts.

While in Europe, borrowing costs tumbled just hours after the European Central Bank (ECB) ended its massive asset-buying scheme.

The “flash” euro zone purchasing managers’ index of business activity in the bloc, slumped to 51.3 in December, its weakest since November 2014.

That was down from a final November reading of 52.7.

The stock market had breathed a sigh of relief in recent weeks on news that the trade war between the United States and China could be cooling down.

Yesterday saw positive comments from US President Donald Trump, who claimed talks were taking place with Beijing by phone.

Goldman Sachs strategists wrote in a note to clients: “Volatility and the number of sharp moves across assets appear to be rising and investors are facing a challenging macro backdrop.”

Martin van Vliet, senior rates strategist at ING, said: “The overnight news in China and taking a look at stocks, sheds light on the move in bonds.

“As far as the ECB is concerned, it was clear there was a dovish bias to the press conference.”



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