There was blood in the markets on Friday, as European stocks fell after posting their first negative month since January amid fears of slowing economic growth.
In London, the FTSE 100 (^ FTSE) fell 0.7% after the opening, while the CAC (^ FCHI) tumbled more than 1% in Paris and the German DAX (^ GDAXI) was down by 1.2%.
âInvestors are now nervously eyeing October and perhaps wondering if this could be the start of new weakness,â said Michael Hewson of CMC Markets.
âAs we head into the last quarter of 2021, the gains for the year to date are still pretty decent, which begs the question of how much is left in the tank and whether this October will live up to the reputation last October and will deliver a huge curve, while giving investors a panic attack. “
Soaring energy prices, supply chain disruptions and inflation concerns will keep traders on their toes.
Read more: UK business confidence crumbles as ‘stagflation’ fears rise
On Wall Street, S&P 500 futures (ES = F) fell 0.5%, Dow futures (YM = F) fell 0.7%, and Nasdaq futures (NQ = F) fell nearly 0.6% at the start of trade in Europe.
The S&P 500 ended September down 4.8%, its first monthly decline since January and the largest since March 2020.
On Thursday, Federal Reserve Chairman Jerome Powell asserted that the surge in inflation data is being caused by supply chain problems and that they will ease. Asked by the House Financial Services Committee, Powell said he expects inflation to drop in the first half of 2022.
Watch: What is inflation and why is it important?
Asian markets fell overnight, building on Wall Street’s worst monthly loss since the start of the pandemic.
In Japan, the Nikkei (^ N225) fell 2.3% while stocks in Taiwan, Southeast Asia and Australia followed suit. The Hang Seng (^ HSI) and the Shanghai Composite (000001.SS) have both been closed for the holidays.
It came as manufacturing activity in Asia stagnated last month, after factories closed in response to new waves of coronavirus.
Surveys released on Friday showed that countries where large Delta variant outbreaks have receded have seen an improvement in activity, such as Indonesia and India. But factory activity in September contracted in Malaysia and Vietnam.
In Japan, business grew at the slowest pace in seven months as the global semiconductor shortage and supply disruptions weighed on performance.
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