Global Stocks Fall After Weak China Export Data
British pound continues to decline on Brexit concerns
By Riva Gold Updated Oct. 13, 2016 8:46 a.m. ET
Global stocks were under pressure Thursday after weak Chinese trade data fostered doubts about the health of the world economy.
Futures pointed to a 0.6% opening loss for the S&P 500, while the Stoxx Europe 600 fell 1.2% in high-volume afternoon trade after a downbeat session in Asia.
Stocks turned lower after official data showed Chinese exports fell 10% year-over-year last month, sparking concerns about the world’s second-largest economy and global demand.
The yen strengthened while Asian shares mostly declined after the data as the figures came in well below economists’ expectations.
In corporate news, shares of Wells Fargo & Company were up 1.5% in premarket trading after the bank said its Chairman and Chief Executive John Stumpf would step down from both roles immediately.
Earnings season for big U.S. banks will begin on Friday with reports from J.P. Morgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.
In Europe, shares of Unilever PLC and Tesco PLC were down 3.6% and 2.1%, respectively, after Britain’s largest grocer pulled Unilever’s products from its online shopping site due to a dispute over pricing following a steep decline in the pound.
A Thai investor reacts as he monitors the electronic boards showing mainly red. ENLARGE
A Thai investor reacts as he monitors the electronic boards showing mainly red. Photo: European Pressphoto Agency
Many retailers of imported products in the U.K. have raised prices in recent weeks, with the British currency down roughly 18% against both the dollar and the euro so far this year.
The British pound steadied on Thursday and was last up 0.1% at $1.2205.
“I don’t think we’ve reached the low in the pound,” said Jordan Rochester, currency strategist at Nomura. Without certainty around the U.K. government’s plans to exit from the European Union or reassurance that it would prefer access to the single market over immigration control, “the market will continue to have Brexit doubts,” he said.
It is no longer just speculative players in the market making short-term bets against the currency, he said.
Bank shares in Europe also declined, with the broader Euro Stoxx Banks index down 2.8%.
Earlier, shares in Asia were mostly lower following the downbeat Chinese trade data, with Hong Kong’s Hang Seng shedding 1.6%.
The Thai stock market has fallen around 6% this week. After markets closed, news broke that Thailand’s King Bhumibol Adulyadej, the world’s longest-serving monarch, died, heralding a potential new bout of instability.
Japan’s Nikkei Stock Average fell 0.4%. The dollar was down 0.5% against the yen at ¥103.7050 after the downbeat Chinese data triggered a flight to safety.
Gold rose 0.4% to $1,258 an ounce, while the yield on the 10-year U.S. Treasury note fell to 1.757% from 1.778% on Wednesday. The 10-year German bund yield fell to 0.048%. Yields move inversely to prices.
In commodities, Brent crude oil inched down 0.1% to $51.74 a barrel, while copper futures fell 1.6% to $4,728 a metric ton, dragging down shares of commodity-sensitive companies such as miners.
The WSJ Dollar Index swung between small gains and losses and was last down 0.1%. The dollar had gained for three days as expectations grew for higher U.S. interest rates this year.
“For the last few weeks, I think focus has been very much on the Fed,” said Jason Pride, director of investment strategy at Glenmede. “I think there’s a growing concern that central banks broadly are pulling back from stimulus efforts.”
Minutes from the Federal Reserve’s September meeting confirmed late Wednesday that officials expected to raise rates “relatively soon,” with several members viewing the decision to leave rates unchanged in September as a “close call.”
—Saabira Chaudhuri contributed to this article.
Write to Riva Gold at
riva.gold@wsj.com