Stocks post worst week of 2015 after China data
Weak manufacturing data out of China leads to rout on markets
A screen shows the final tally for the Dow Jones Industrial Average on the floor of the New York Stock Exchange, yesterday. Photograph: Brendan McDermid/Reuters
World stock markets tumbled towards their worst week of the year yesterday and commodities got another kicking, as more alarming data from China sent investors scurrying to the safety of bonds and gold.
The data from China showed its manufacturing sector slowing dramatically, confirming worries about its economic health. Oil prices were on track for their longest losing streak since 1986, as fears of a China-led deceleration in global growth affected sentiment.
Europe’s bourses also ended up deep in red but did claw back some ground as traders breathed a sigh of relief as manufacturing and services data from the euro zone improved.
Fellow Iseq heavyweight Ryanair slid 3.6 per cent to close at €12.05 as did other airline stocks around Europe. Packaging group Smurfit Kappa, meanwhile, saw nearly 4 per cent come off its value, closing the day at €26.07 again echoing its rivals in Europe.
Amid the ongoing war of words with its chief shareholder Worldview, energy group Petroceltic dropped over 10 per cent to end the week at €0.67. Bank of Ireland dropped 1.1 per cent to €0.34 and Paddy Power fell 1.2 to close at 78.89.
Fresnillo closed down 0.4 per cent while Randgold Resources fell 0.3 per cent. The broader FTSE 350 mining index languished near its lowest level since 2009. Miners are cutting back on capital spending to cope with the China-led hit to metals prices; Rio Tinto said it expected to ship more iron ore to China this year.
Health-care shares fell the most of the 19 industry groups on the Stoxx 600 today. Novartis’s 3.6 per cent drop contributed the most to losses, after it announced a deal to buy the rights to an experimental drug from GlaxoSmithKline for as much as $1 billion.
The S&P 500 suffered its biggest daily percentage drop in nearly four years on Friday as fears of a China-led global slowdown continued to rattle investors. The Dow Jones industrial average fell 530.81 points, or 3.12 percent, to 16,459.88, the S&P 500 lost 64.7 points, or 3.18 percent, to 1,971.03 and the Nasdaq Composite dropped 171.45 points, or 3.52 percent, to 4,706.04., with the S&P trading below 2000 and the Dow about 150 points shy of moving into correction territory.
About three-fourths of the 30 stocks on the Dow Jones industrial average and two-thirds of S&P 500 components were in correction territory, meaning their session lows were at least 10 per cent below their 52-week highs.
Two bright spots were HP, up 3 per cent, and Salesforce, up 2 per cent.
The stocks were the biggest gainers on the S&P 500 after their quarterly results. Netflix fell 5.5 per cent to $106.33 after a Wall Street Journal report on Thursday said US states are eyeing taxes on video and live-streaming services.