MW: European markets fall as Japan adds to global-growth worries
European shares fell on Monday, after an unexpected slide into recession in Japan added to investors’ gloom over the global economy.
The Stoxx Europe 600 index SXXP, -0.26% was 0.3% lower in early trade. The benchmark had ended Friday’s session down 0.1% after data showed only modest economic growth in the eurozone in the third quarter.
Monday’s fresh losses followed a nearly 3.0% loss for Tokyo’s Nikkei index NIK, -2.96% after Japan’s economy was shown to have shrunk in the third quarter, undoing some of the positive impact of the Bank of Japan’s plan to expand its stimulus program, announced last month.
The figures underlined the challenge faced by Prime Minister Shinzo Abe in his bid to revive Japan’s economy.
“Japan’s Abenomics appears to have hit a problem,” said UBS economist Paul Donovan.
In Europe, all major indexes were lower, with Germany’s DAX DAX, -0.16% losing 0.3%, France’s CAC 40 PX1, -0.26% down 0.1%, and the U.K.’s FTSE 100 UKX, -0.19% slipping 0.2%.
The “shocking” numbers from Japan added to the already downbeat tone in global financial markets, said analysts at Rabobank.
Investors were looking ahead to business activity data for the eurozone later in the week for any sign of an improvement in November.
In currency markets, the yen USDJPY, -0.21% edged higher against the dollar, in a reaction that is typical of the Japanese currency’s tendency to climb in times of stress. The euro EURUSD, -0.30% and the pound GBPUSD, -0.26% were steady against the buck in early trade.
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