A roundup of trading on major world markets:
NEW YORK – US stocks have declined for a second day, weighed down by tepid data on private sector US jobs and a retreat in biotech shares.
The ADP private sector employment report showed hiring in April fell to its lowest levels in three years.
A strengthening labour market is expected to influence the pace of future rate hikes, although traders are pricing in only one hike later this year.
An accommodative Fed, along with a recovery in oil prices, have helped US stocks rally back from sharp losses at the start of the year.
“The market is absorbing the move from the February bottom,” said Bruce Zaro, chief technical strategist, Bolton Global Asset Management in Boston.
“That would make sense to me at this point, given the seasonality and that the market came close to its all-time high. I’m seeing a lot of comments on ‘sell in May and go away’.”
‘Sell in May and go away’ is a Wall Street adage that refers to stocks being less likely to make big gains in the summer months.
The Dow Jones industrial average was down 99.65 points, or 0.56 per cent, to 17,651.26, the S&P 500 had lost 12.25 points, or 0.59 per cent, to 2051.12 and the Nasdaq Composite had dropped 37.59 points, or 0.79 per cent, to 4725.64.
LONDON – In Europe, surveys indicated that growth in the eurozone will be slow but steady, underscoring concerns about the vulnerability of the bloc’s upturn.
Retail sales also fell across the eurozone as a whole in March, adding to the cautionary tone.
MSCI’s all-country world index of stock performance in 46 countries fell 0.92 per cent, while the pan-regional FTSEurofirst 300 index closed down 1.2 per cent to 1,302.72 points, its lowest close in nearly four weeks.
The index of leading European shares lost 1.7 per cent on Tuesday.
The FTSE 100 lost 73.57 points, or 1.19 per cent, to 6,112.02 while Germany’s DAX lost 98.52 points, or 0.99 per cent, to 9,828.25.
“We may have the odd move higher, but we remain in a longer-term bear market,” said Andreas Clenow, chief investment officer of ACIES Asset Management in Zurich.
Lacklustre manufacturing data from around the world had sparked the selling on Tuesday, notably Chinese factory activity shrinking for the 14th straight month and British output at three-year lows.
Shares of global diversified miner BHP Billiton tumbled 5.8 percent, hit by news of a 155 billion-real ($43.5 billion) lawsuit filed in Brazil against iron ore miner Samarco, owned by BHP and Vale.
HONG KONG – Asian shares have skidded as investors fretted about weak global growth and creeping deflation, undermining commodities and boosting demand for safe-haven sovereign debt.
Equities were cold-shouldered in the rush to safe-haven assets and MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.1 per cent.
Tuesday’s rate cut from the Reserve Bank of Australia (RBA), the first in a year, further underlined how the danger of deflation was spreading worldwide.
“Global yields fell sharply after the RBA cut gave a low inflation signal to markets,” said analysts at Australia and New Zealand bank in a note.
“Concerns include a weaker company earnings outlook for banks, utilities, and commodity-producing companies. Sluggish economic growth remains a concern too, with many central banks reaching the limits of what can be done.”
The yen ran into profit-taking, which dragged it back to 107.11 per US dollar from an 18-month peak of Y105.55. But that followed a 5 per cent gain last week when the Bank of Japan refrained from offering more stimulus.
The Nikkei remained closed for a public holiday.
The Hang Seng closed down 151.11 points, or 9,73 per cent, at 20,525.83 while the Shanghai lost 4.08 points, or 0.13 per cent, to 3,209.46
WELLINGTON – The S&P/NZX 50 Index dropped 18.5 points, or 0.3 per cent, to 6,824.49.
