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Weak Chinese data knocks down stock markets

Published 08/03/2016, 09:25
© Reuters. Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt
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By Sudip Kar-Gupta

LONDON (Reuters) - Global stock markets fell on Tuesday after another batch of weak data from China reinforced persistent concerns about a possible slowdown in the global economy.

Exports from the world's second-biggest economy tumbled 25.4 percent in February compared with the same month last year, while its imports dropped 13.8 percent.

The pan-European FTSEurofirst 300 index (FTEU3) fell 1 percent while the MSCI All-Country World index (MIWD00000PUS) weakened 0.3 percent.

Japan's safe-haven yen notched up gains while the low-yielding euro moved up against the dollar on Tuesday as appetite for riskier assets and currencies waned following the weak Chinese data. [FRX/]

The soft Chinese exports figures also impacted oil and metals prices. [O/R] [MET/L]

"At the moment we're in a bear stock market. Everyone's looking for an excuse to sell out, and the reason today for a lot of investors is the weak China data," said Andreas Clenow, hedge fund principal and trader at ACIES Asset Management.

The MSCI Emerging Market index (MSCIEF) fell 0.7 percent while U.S. stock index futures also declined.

The euro was also impacted on currency markets by expectations of more monetary stimulus measures by the European Central Bank (ECB) this Thursday, as the ECB seeks to boost economic activity within the euro zone.

Already struggling with ultra low inflation after years of crisis, the ECB has all but promised policy easing on Thursday but the devil will lie in the details.

A small 10 basis point cut to push its deposit rate deeper into negative territory is a foregone conclusion while some type of adjustment of the bank's 1.5 trillion euro asset purchase programme is also near certain.

Nevertheless, investors expressed uncertainty over the extent of the ECB's likely new measures on Thursday.

© Reuters. Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt

"We think the central bank will once again struggle to beat high expectations, with the euro not likely to suffer significantly after the announcement," BNP Paribas (PA:BNPP) analysts wrote in a note to clients.

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