Markets down on China fears

On Friday global markets were negative, worried by concerns over China’s markets, the potential for a U.S. corporate tax hike and an update on the U.S. Federal Reserve’s tightening strategy next week.

MSCI’s gauge of stocks across the globe lost 0.82%, while the pan-European STOXX 600 index was down 0.9% for a third consecutive week of losses. So far this month, the STOXX fell about 2%. MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.09%.

European stocks were negative, capping their third straight week in the red as the basic resources sector was hurt by declines in Anglo American, but news that Britain was considering lessening travel restrictions lifted airlines and hotel groups.

The pan-European STOXX 600 index lost 0.9% on the day. London’s miner-heavy FTSE 100 index fell 0.9%, while German stocks lost 1.0%. Most regional indexes were under pressure this week on worries about slowing global growth and tougher regulation of Chinese firms.

Meanwhile, after closing with an increase of 3.4% on Thursday in one of the best single-day performances this year, the European travel and leisure index gained1.2%. The index closed 2.7% higher for week, leading gains across European sectors.

Wizz Air, British-Airwaysowner IAG and InterContinental Hotels gained between 2% and 5% after Britain said it would simplify COVID-19 rules for international travel.

While European stock markets were positioned to close the week stable, next week could be crucial in establishing near-term market direction, with the U.S. Federal Reserve and the Bank of England’s policy meetings, as well as German elections due.

Data showed British retail sales surprisingly fell again in August in what is now a record streak of monthly declines.

In the United States, there was increased worries that a possible rise in corporate taxes could eat into earnings as leading Democrats and President Joe Biden sought to raise the top tax rate on corporations to 26.5% from the current 21%.