Asian markets tumble on growing global economy fears

HONG KONG Asian markets tanked Thursday after a

below par US jobs report compounded worries about the worlds top economy

while the WTO fanned fresh trade war fears by allowing Washington to impose

tariffs on the European Union.

Investors tracked yet another plunge in Europe and on Wall Street where

all three main indexes fell more than one percent for a second day and

shifted into safer assets such as gold which rose more than one percent.

On Wednesday data from payrolls firm ADP showed US companies added far

fewer jobs than expected last month while Augusts reading was also revised

sharply lower. That followed news of the weakest US manufacturing conditions

since 2009 at the height of the financial crisis.

The figures also come before the release of non farm payrolls data Friday

that are closely watched for a gauge on the health of the economy with

observers now fretting that a slowdown across the world could now be biting

in the United States.

New York traders rushed for the exit as did their European counterparts

who were also hammered by fears Britain will leave the EU without a divorce

deal as well as increasingly bleak economic data in the region.

The market was still digesting the weaker (factory) data and the

implication for global growth then got whacked with the slide on the ADP data

compounded by a catastrophic decline in US auto sales which now raises more

questions than answers about the resilience of the US consumer said Stephen

Innes Asia Pacific market strategist at AxiTrader.

Hopes for a China US trade breakthrough could keep the risk on light

flickering but the dreary economic data does perhaps suggest that traders

could be better sellers in this risk toxic environment he added.

Brussels cool on Brexit plan

Just as Washington and Beijing prepare for high level trade talks this

month the World Trade Organization provided markets with a fresh headache by

ruling that the EU had given illegal support to plane maker Airbus allowing

the US to impose billions in tariffs on the bloc.

Washington later announced a series of levies starting on October 18.

However the WTO is due to rule in the next six months on whether to allow

the EU to impose its own huge tariffs the other way over US subsidies to

Boeing raising the possibility of another bruising trade war between the US

and a key trade ally.

Asian equity markets were all deep in the red. Tokyo went into the break

two percent lower while Sydney shed more than two percent Wellington lost

1.3 percent and Hong Kong lost 0.7 percent.

Singapore and Taipei shed 0.8 percent each while Manila and Jakarta were

both off 0.9 percent.

The weak US data has ramped up the possibility the Federal Reserve will cut

interest rates for a third time this month weighing on the dollar against

most currencies including higher yielding riskier units.

It held its ground against the pound after Prime Minister Boris Johnson

published his final Brexit proposals and warned the EU that Britain would

leave without a deal on October 31 if the bloc did not accept them.

Brussels reacted coolly to the proposal raising the likelihood of a messy

divorce just as the British economy comes under strain.

Oil prices edged up but were unable to recover Wednesdays heavy losses

caused by worries about the effects on demand from the stuttering global

economy.

Both main contracts are now below their levels before last months rocket

attack on Saudi crude facilities that wiped out five percent of world

supplies and sent prices soaring.

Key figures around 0230 GMT

Tokyo Nikkei 225: DOWN 2.0 percent at 21337.94 (break)

Hong Kong Hang Seng: DOWN 0.7 percent at 25851.19

Shanghai Composite: Closed for a public holiday

Dollar/yen: DOWN at 107.15 yen from 107.16 yen

Euro/dollar: UP at $1.0959 from $1.0958 at 2115 GMT

Pound/dollar: UP at $1.2299 from $1.2295

West Texas Intermediate: UP 22 cents at $52.86 per barrel

Brent North Sea crude: DOWN 10 cents at $57.79 per barrel

New York Dow: DOWN 1.9 percent at 26078.62 (close)

London FTSE 100: DOWN 3.2 percent at 7122.54 (close)

Source: Bangladesh Sangbad Sangstha (BSS)