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Stock markets, oil prices retreat as China weighs
By AFP - Sep 03,2024 - Last updated at Sep 03,2024
LONDON — Stock markets and oil prices retreated on Tuesday, weighed down by China's struggling economy according to analysts.
Brent North Sea crude shed more than 2 per cent, as European and Asian equities slid.
A stream of indicators, including the latest on manufacturing, has highlighted weakness in the Chinese economy, the world's second largest after the US.
China's "only plan for recovery seems to be in exporting its way out of economic doldrums", noted John Evans, analyst at oil broker PVM.
"Yet, external demand flounders in the face of a global economy that on the whole is sputtering at best."
Traders were awaiting US manufacturing figures on Tuesday ahead of key American jobs data on Friday, hoping for a clearer picture on the pace of US interest-rate cuts set to begin this month.
Wall Street reopens on Tuesday after a long holiday weekend in the US.
In foreign exchange, the yen strengthened after Bank of Japan chief Kazuo Ueda restated his intention to lift interest rates again if inflation and the economy meet its forecasts.
The bank's surprise decision to hike in July, hours before the Federal Reserve indicated it was ready to begin cutting US borrowing costs, sparked a massive unwind of the so-called "yen carry trade" in which investors used the cheap currency to buy high yielding assets like stocks.
In company news on Tuesday, shares in Cathay Pacific slipped as the Hong Kong carrier said that 15 of its Airbus A350 jets needed new engine parts after inspecting its entire fleet, which was grounded following a "first of its type" engine component failure.
British engine manufacturer Rolls-Royce on Tuesday confirmed that its Trent XWB-97 engines powered the planes, helping its shares recover slightly after starting the week with a 6.5-per cent drop.
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