The Low Post News

China Data Knocks Down Shares in Europe

On Monday, shares across Europe fell after new data indicated that manufacturing in China contracted during the first quarter increasing the worries over growth globally.

Concern grabbed the nerves of investors as President Barack Obama from the U.S. started talks with allies in Europe over their Crimea crisis response.

The euro was up against the U.S. dollar but German Bund futures saw their losses extended after the purchasing mangers’ index in France was up to 51.6 for March from last month’s 47.9.

However, the gains on the currency were short lived after figures showed that Germany’s growth had slowed. Data from the common currency zone dropped as a whole compared to February.

The Purchasing Manager’s Index in China, from the HSBC dropped to a low of eight months, from 48.5 in February to 48.1 in March.

The index has remained below 50 since the start of the New Year. Any score in excess of 50 shows expansion, while anything under that indicates a contraction.

The slowdown in China is sharper than most people expected said one analysts in Asia, which fuels investor worries about its impact on the growth of the world’s economies as a whole.

Nevertheless, the analysts said authorities in China have a number of tools at their disposal to avoid the economy there from having a hard landing.

A series of weak numbers reinforced concern of a slowdown in the second largest economy in the world.

Asian shares were not impacted as much as European shares because the data increased the expectations that China would use the needed steps to stimulate the economy.

Analysts said the markets this week would be driven partly by the geopolitics as President Obama began discussion with his allies in Europe over their response to the annexing of Crimea by Russia.

In the biggest confrontation between East and West since the end of the Cold War, the U.S. and the European Union imposed bans on visas and froze assets of some of the closest allies of Vladimir Putin the President of Russia.

However, they held back on measures that are designed to hit the wider economy in Russia.

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