Monday, January 4, 2016 9:39 am
European shares fell sharply on Monday, the first day of trading for 2016, as weak Chinese economic data weighed on world stock markets.
The pan-European FTSEurofirst 300 index fell 2.3 percent, while the euro zone’s blue-chip Euro STOXX 50 index declined by 2.6 percent.
China’s factory activity contracted for the 10th straight month in December and at a sharper pace than in November, a private survey showed, dampening hopes that the world’s second-largest economy will enter 2016 on a more stable footing.
The weak data caused Chinese and Asian shares to slump, with China’s benchmark CSI300 share index tumbling 7 percent on Monday, prompting the stock exchange to halt trading for the rest of the day.
Shares in carmaker Fiat Chrysler fell after the spin-off of its Ferrari division, but French conglomerate Bouygues outperformed to rise 1.3 percent after a media report that Orange was moving closer to buying Bouygues’ telecoms arm for 10 billion euros ($10.86 billion).
Hong Kong stocks posted their biggest fall in three months on Monday, marking a gloomy start for 2016, pulled lower by slumping mainland shares and weak global markets.
The Hang Seng index fell 2.7 percent, to 21,327.12, registering its biggest one-day percentage fall since Sept. 29. The China Enterprises Index lost 3.6 percent, to 9,311.18 points.
Sentiment was damped by the savage sell-off in mainland equity markets, which tumbled 7 percent and triggered the circuit breaker mechanism that cut China’s trading session short.
The panic on the mainland, triggered by sluggish factory activity surveys, fears of a share supply glut and a weaker yuan, spread to Hong Kong as well.
Shares fell across the board, with commodity, financial and industrial stocks among the biggest losers.