Weak PMI data prompted investors to a heavy sell-off in equities

Monday, February 03, 2014

Weak PMI manufacturing data from the US and China dominated the global equity markets today, weighing on market sentiment and prompting another round of heavy sell-offs. Dow Jones has plunged more than 190 points at the time of writing (-1.2%), while S&P 500 has retreated sharply by 1.23% toward 1750 points.

European equity markets have been tracking the recent downtrend across the markets, despite that, the Eurozone’s manufacturing PMI data was in line with expectations, showing that the European economic conditions are slightly improving.

However, following the downside momentum, CAC, DAX and IBEX extended losses in today’s trading session, falling between 1.3% and 2%, while the London benchmark index managed to erase earlier losses, ending lower by 0.69%.

In commodities, base metals prices came under further pressure as the disappointing Chinese PMI figures raised renewed concerns about a slowdown in the Chinese economy including a possible decline of base metals demand. Aluminium retreated sharply to retest the 1,680 area, while Copper breached below 7,050 area. 

Tomorrow, investors will be keeping an eye on the release of the Eurozone’s producer prices as well as UK Markit/CIPS PMI data, while in the US the main focus will turn to the release of the durable goods and factory orders data for December as well as the ISM New York index, which could provide further signs about the US economic prospects and give some direction to the US dollar.

 

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