(menafn – ecpulse)
With the start of the session today pessimism dominated the market after the HSBC PMI manufacturing showed that the performance of the Chinese manufacturing sector contracted further in March, adding concerns that the global economy isn’t on the right track of recovery.
The HSBC Flash manufacturing PMI showed that the Chinese manufacturing sector contracted to 48.1 from the previous 49.7, adding more concerns that the slowdown in Europe has significantly affected other major economies across the globe such as U.S. and China.
The sentiment deteriorated and pessimism spread across the board after Germany, France and the euro zone started to release the Purchasing Managers' Indexes for manufacturing and services, which came below expectations renewing fears that the debt crisis will worsen again and accordingly European nations probably will slip into deep recession.
The European common currency and European main equities reversed sharply to the downside after the news, extending the losses incurred since the start of this week on rising jitters and renewed fears that growth might not pick again anytime soon and in result European nations will slip into deep recession especially after the austerity measures adopted by several European countries, which might force further downside pressures on the expected slight growth that might turn now into contraction.
The German manufacturing sector contracted to 48.1 from 50.2 in March, while the French sector contracted to 47.6, the lowest since November, from 50.0 and accordingly the European manufacturing sector dropped to 47.7 from 49.0.
The services sector contracted more than expected but in a slower pace than manufacturing, where the performance of the European services sector contracted to 48.7, the lowest in three months, from 49.3, while the German services slowed to 51.8 from 52.8. The contraction seen in manufacturing and services led the PMI composite to drop to 48.7 from 49.3.
The euro is currently trading around 1.3151 versus the U.S. dollar, compared with the opening level of 1.3217 and the high of 1.3253 and the low of 1.3132.
The European STOXX 600 was 1.29 points lower as of 05:30 EST, trading around 265.20 point, led by the basic material and industrial sectors which shed 2.35% and 1.61% respectively.
The German DAX shed the most today after the unexpected decline in manufacturing and services, cutting so far 1.66% to 6954.26 points, led by the basic material sector which shed 2.05%, noting that all the German sectors dropped today.
The French CAC 40 also declined on the news cutting so far 1.63% to 3469.80 points, led by the industrial sector which shed 2.73%.