Stocks fell sharply in Europe and Asia on Monday, amid fears that the Group of 20 meeting this week will fail to come up with a plan to restart global growth and signs of chaos in the auto industry, The New York Times’s David Jolly and Bettina Wassener reported.
In Washington, the White House on Sunday pushed out the chairman of General Motors and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid. The moves came just hours after the board of the French automaker PSA Peugeot Citroën said it had fired its chief executive.
Resurgent concerns about the health of the U.S. banking sector, including comments from leading executives at JPMorgan Chase and Bank of America that March has been tougher for them than the first two months of the year, also tempered the mood of investors, including
In early trading, the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, fell 3.3 percent, while the FTSE 100 index in London fell 2.1 percent. The CAC 40 in Paris fell 2.9 percent, and the DAX in Frankfurt fell 3.2 percent.
General Motors, which trade in Frankfurt, fell 17 percent at the opening, and Peugeot fell 4.9 percent in Paris trading. But financial shares were the big losers, with Barclays falling 9.3 percent, UBS falling 6.9 percent and Deutsche Bank dropping 7.7 percent.
Trading in U.S. index futures suggested Wall Street stocks would tumble at the opening. On Friday, the Standard & Poor’s 500 index fell 2 percent.
The Tokyo benchmark Nikkei 225 stock average fell 4.5 percent, led by slumps in the shares of the country’s carmakers. Toyota Motor shed 3.7 percent, Honda fell 6.7 percent and Nissan dropped 7.7 percent. Suppliers also were hard hit by worries about the potential industry-wide fall out that a collapse of Chrysler or General Motors would mean.
News earlier in the day that Japan’s industrial output had slipped for a fifth consecutive month revealed – once again – the severe impact of slumping exports and weak domestic demand, which has forced manufacturers across the country to cut back production and shed workers.
The Tankan, a closely-watched quarterly business survey that will be released by the Bank of Japan on Wednesday is expected to reinforce the point – analysts widely expect sentiment to have slumped to its lowest level in more than three decades.
“All the leading indicators we look at to forecast the Tankan look absolutely dreadful,” Patrick Bennett, an analyst at Societe General in Hong Kong, told The Times.
Elsewhere in Asia, the S&P/ASX 200 in Sydney dropped 1.9 percent. The Hang Seng index in Hong Kong fell 4.7 percent in late trading, while the Shanghai Stock Exchange composite index fell 0.7 percent. The Straits Times index in Singapore slumped 4 percent and in South Korea, the Kospi index dropped 3.2 percent.
U.S. crude oil futures for May delivery fell $1.46 to $50.92 a barrel. Comex gold for April delivery rose $3.60 to $926.80 an ounce.
The dollar rose against major European currencies. The euro fell to $1.3182 from $1.3290 late Friday in New York, while the British pound fell to $1.4162 from $1.4320. The dollar rose to 1.1504 Swiss francs from 1.1441 francs. But the dollar fell to 96.14 yen from 97.87 yen.
Many market watchers had been forecasting that a rally that has sent most major stock indexes up significantly over the past two weeks was likely to peter out or even reverse.
