European stocks down after weak business surveys

Germany’s main share index fell over 1% on Monday, leading European markets lower after business activity readings from across the euro zone suggested growth had ground to a halt.

Surveys showed growth in services and manufacturing in the euro zone, Germany and France had all stalled in September, fanning concerns of a slide towards recession and suggesting further support for the economy is required.

Euro zone stocks slipped 1.1%, while Germany’s DAX index tumbled 1.4% as the latest survey of purchasing managers showed its manufacturing sector sinking deeper into recession.

Banks were among the worst hit, with the eurozone banking index slumping 2.6%, including a more than 5% fall for Germany’s Commerzbank. The pan-European STOXX 600 index fell nearly 1%.

Investors also remained worried by mixed signals from U.S.China trade talks. Over the weekend, the U.S. Trade Representative’s office issued a brief statement describing the two days of talks with China as “productive.” Wall Street had fallen, however, on Friday after a Chinese agriculture delegation canceled a planned visit to U.S. farm states. Market participants are still unconvinced that a trade deal between the two countries is likely anytime soon.

The travel and leisure sector gained 0.3% with a number of tour operators and airlines gaining from expectations their businesses will benefit from the collapse of British rival Thomas Cook. Shares of TUI jumped 6.6%, the most on the STOXX 600, while EasyJet and Ryanair Holdings were close behind.

Most Asian share markets slipped on Monday as investors waited for more clarity on SinoU.S. trade talks, while oil gained more than 1% as Middle East tensions remained elevated. Market sentiment was fragile with civil unrest in Hong Kong, tensions in the Middle East and worries a trade deal between the United States and China could take a long time to materialise. Moves were further exaggerated by low volumes as Japanese markets were shut for a public holiday.