Stock Markets Decline Amid Trade Policy Fears and Chinese Deflation

European and Asian stock markets fell due to fears of economic impact from Trump’s trade policies and negative data from China showing deflation. Key markets, including London and Frankfurt, registered declines, while Trump expressed uncertainty about a possible recession. Meanwhile, Chinese leaders set a modest growth target for 2025 amid an ongoing economic transition, emphasizing the need for measures to counter weakening domestic demand.

Stock markets across Europe and Asia experienced declines on Monday, driven by concerns surrounding the potential impact of President Donald Trump’s trade policies on economic growth in the United States and China, which are the world’s two largest economies. Investors reacted to disappointing data indicating that Chinese consumer prices had reverted to a state of deflation, intensifying worries about economic growth prospects.

Key European indices including those in London, Paris, and Frankfurt declined, reflecting losses in Hong Kong and Shanghai. Conversely, the Tokyo stock market concluded on a positive note. Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted, “Unease about the effect of Trump’s tariffs hangs over financial markets at the start of the week.”

The impending threat of a recession in the United States was spotlighted following Trump’s ambiguous comments during a Fox News interview, where he stated, “I hate to predict things like that,” when asked about the possibility of an economic downturn this year. He acknowledged ongoing transitions in wealth repatriation efforts, emphasizing that recovery entails a gradual process.

Investor attention also remained focused on Beijing, where Chinese leaders concluded their annual meeting, confirming a 2025 growth target of approximately five percent, prioritizing domestic demand, and announcing increased fiscal funding. Recent data depicted a concerning drop in consumer prices by 0.7 percent in February, the first decline in over a year, highlighting the dire need for effective economic interventions.

Stephen Innes from SPI Asset Management commented on the situation, stating, “The data only reinforces what’s been clear for months — deflationary pressures remain firmly entrenched in the world’s second-largest economy. The property sector remains stuck in the mud, domestic demand is weak.”

Key index figures around 1100 GMT indicated the following:
– London – FTSE 100: DOWN 0.5 percent at 8,637.70 points
– Paris – CAC 40: DOWN 0.5 percent at 8,084.09
– Frankfurt – DAX: DOWN 0.9 percent at 22,810.93
– Tokyo – Nikkei 225: UP 0.4 percent at 37,028.27 (close)
– Hong Kong – Hang Seng Index: DOWN 1.9 percent at 23,783.49 (close)
– Shanghai – Composite: DOWN 0.2 percent at 3,366.16 (close)
– New York – Dow: UP 0.5 percent at 42,801.72 (close)
– Euro/dollar: UP at $1.0862 from $1.0844 on Friday
– Pound/dollar: DOWN at $1.2924 from $1.2925
– Dollar/yen: DOWN 146.99 yen from 147.97 yen
– Euro/pound: UP at 84.06 pence from 83.87 pence
– Brent North Sea Crude: UP 0.1 percent at $70.45 per barrel
– West Texas Intermediate: UP 0.1 percent at $67.12 per barrel.

In summary, the stock markets in Europe and Asia largely declined due to growing fears regarding the ramifications of President Trump’s trade policies and a potential recession in the United States. The disappointing deflationary data from China has further compounded investor anxiety. With key global indices reflecting this unease, attention remains fixed on economic developments in both nations, particularly China’s efforts to enhance domestic demand amidst challenging conditions.

Original Source: www.kpvi.com