Global stocks fall, oil dips as Japan enters recession

London, Nov. 17: Shares fell and the oil price slid on Monday after data showed Japan had slipped into recession, raising concerns about global growth.

European shares opened lower. They followed Tokyo’s Nikkei index which lost 3 per cent, its biggest one- day drop since August on news that the world’s third- largest economy unexpectedly shrank by an annualised 1.6 per cent in the third quarter.

This followed a 7.3 per cent contraction in the previous quarter caused by a rise in the national sales tax and ran count- er to economists forecasts for a 2.1 per cent rebound.

The data initially pushed the yen to a seven- year low against the dollar, but as Tokyo stocks fell the Japanese currency rebounded.

News Japan had tipped into recession also shaved $ 1 off the price of Brent crude oil and sent ripples across Europe, where the FTSEurofirst 300 pan- European share index was down 0.3 percent. Data on Friday showed euro zone economic output expanded more than expected in Q3 but remained weak.

“It’s a bit of shock for the market, because people believed that the Bank of Japan had everything under control. But overall, the initial negative reaction shouldn’t last too long. Investors still expect central bank action worldwide to support the global economy,” FXCM analyst Nicolas Cheron said.

MSCI’s main index of Asia- Pacific stocks outside Japan lost 0.5 percent. Chinese equities dropped as profit taking outweighed buying by foreign investors as a landmark Hong KongShanghai stock debuted on Monday.