World stocks experience sixth straight day of losses
World stocks marked a sixth straight day of losses on Wednesday, oil prices slumped to twomonth lows and Wall Street was tipped for a lower open after fresh signs that global economic growth and company profits may be losing steam.
Hefty U.S. losses the day before have left MSCI’s all-country benchmark near one-year lows, possibly putting it on course for its worst month in six years. The index is now down 12 percent from record highs hit in January.
European shares traded higher, however, after approaching twoyear lows . They took their cue from Asian markets, which managed to close flat after Chinese media reported authorities were considering allowing insurance firms to invest in equities
Factors that have conspired to knock markets this week include disappointing company earnings, a spat between Italy and the European Union over Italy’s budget, criticism of oil power Saudi Arabia over the killing of a dissident journalist and finally, worries that world growth is losing steam.
Growth worries were highlighted by the International Monetary Fund, which recently cut forecasts, citing trade wars and capital flight from emerging markets. The latest European PMI surveys underscored that view, showing German private-sector growth at the slowest in three years.
There are also signs U.S. economic and earnings growth, fuelled partly by tax cuts, may be waning. Wall Street suffered heavy losses on Tuesday after some companies, among them industrial giant Caterpillar, maintained or cut profit forecasts.
European equity sentiment was hit by weak PMIs but bank and tech shares took the worst beating after disappointing earnings at the sickly German giant Deutsche Bank and at chipmaker STMicroelectronics. The lacklustre growth picture narrowed the gap between German two-year and 10-year yields, flattening the yield curve — a classic sign of growth worries DE2DE10=RR.
British Prime Minister Theresa May meets later with Conservative Party lawmakers, some of whom have discussed toppling her, disgruntled with ongoing Brexit negotiations.