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Stock Markets Start New Year With a Slide | |
(about 2 hours later) | |
HONG KONG — Investors hoping for a fresh start in 2019 were disappointed on Wednesday as shares on Wall Street tumbled at the start of trading after declines in Europe and Asia. | |
The global drop followed weak economic data from China that returned investors’ focus to the softening outlook for the global economy. | |
Investors had hoped for a respite from last year, when markets in the United States fell more than 6 percent and many global indexes fell even more. Slowing global economic growth, higher interest rates in the United States, the simmering trade war between Washington and Beijing, and rising uncertainty in American politics all weighed on stocks. | |
[Wall Street’s stock pickers are still hopeful about the year ahead, but here are four things they’re worried about.] | |
On Wednesday, their mood did not improve. | |
Bad economic news from China set the tone in Asia, where stocks fell on every major exchange that was open. Factory activity in China shrank in December, according to government and private measures released this week. The dour numbers indicate that the trade war between China and the United States was beginning to weigh on the Chinese manufacturing sector. | |
In Europe, morning trading also started on a pessimistic note. The latest manufacturing data for the eurozone released on Wednesday showed an across-the-board slowdown in December. The Euro Stoxx 50 was down more than 1 percent in afternoon trading. | |
The Hang Seng in Hong Kong dropped 2.8 percent. In China, the Shanghai Composite index fell 1.2 percent and the Shenzhen Composite index closed 0.9 percent lower | The Hang Seng in Hong Kong dropped 2.8 percent. In China, the Shanghai Composite index fell 1.2 percent and the Shenzhen Composite index closed 0.9 percent lower |
The Taiex index in Taiwan fell 1.8 percent, while the Kospi in South Korea was down 1.5 percent. Japan’s markets were closed for a holiday. | The Taiex index in Taiwan fell 1.8 percent, while the Kospi in South Korea was down 1.5 percent. Japan’s markets were closed for a holiday. |
Many investors had hoped the poor sentiment that weighed on markets at the end of December might dissipate in 2019, particularly on Wall Street, where the underlying American economy is still viewed as sound. | Many investors had hoped the poor sentiment that weighed on markets at the end of December might dissipate in 2019, particularly on Wall Street, where the underlying American economy is still viewed as sound. |
But the poor data from China highlighted the risks of a continuing trade war, as well as slowing global growth. In the United States, increased borrowing costs could also weigh on stock prices, while uncertainty surrounding Britain’s departure from the European Union continues to unnerve investors. The pound, a barometer of concern surrounding Brexit, fell to $1.2674. | But the poor data from China highlighted the risks of a continuing trade war, as well as slowing global growth. In the United States, increased borrowing costs could also weigh on stock prices, while uncertainty surrounding Britain’s departure from the European Union continues to unnerve investors. The pound, a barometer of concern surrounding Brexit, fell to $1.2674. |