Global stocks fall on weak US manufacturing data

NEW YORK Stock markets on both sides of the

Atlantic took a steep downward turn on Tuesday after a US survey pointed to

the weakest manufacturing sector in a decade.

Combined with a tepid inflation reading from the eurozone, and confirmation

that British GDP contracted in the second quarter, the figures rekindled

fears over worldwide growth.

An index of US manufacturing activity fell to the lowest level since June

2009, according to the Institute for Supply Management, which pointed to

trade conflicts as the biggest headwind.

Global trade remains the most significant issue, as demonstrated by the

contraction in new export orders that began in July 2019, Timothy Fiore,

chair of ISM's manufacturing survey, said in a statement. Overall, sentiment

this month remains cautious regarding near-term growth.

The report came as the World Trade Organization on Tuesday cut its 2019

trade growth forecast to 1.2 percent, warning of an economic hit from

tensions over international commerce.

Trade conflicts heighten uncertainty, which is leading some businesses to

delay the productivity-enhancing investments that are essential to raising

living standards, Azevedo said.

And he cautioned that job creation could also be threatened as firms

employ fewer workers to produce goods and services for export.

Eurozone stocks, which had spent most of the session calmly tweaking

portfolios at the start of the final quarter, suffered an abrupt fall to end

the day.

Wall Street, which had opened higher, fell quickly into the red and stayed

down the rest of the day. Major indices ended down more than one percent.

The ISM report was a game changer, said LBBW's Karl Haeling.

There's a growing recognition that the spread of negative economic

impulses around the world is starting to land on US shores in a meaningful

way.

Analysts have pointed to upcoming trade talks between Beijing and

Washington as critical to the market's fortunes in the coming period.

Other key potential catalysts include the third-quarter corporate earnings

period and upcoming Federal Reserve meetings that could lead to lower

interest rates.

Strike hits GM

Among individual companies, General Motors dropped 3.7 percent as a United

Auto Workers strike further pinched operations.

The company announced it will furlough 6,000 workers in Mexico due to the

strike, while JPMorgan Chase estimated the strike has cost the company around

$1 billion so far. Workers in Canada also were laid off temporarily.

Shares of online brokerage firms plunged after Charles Schwab announced

plans to eliminate commissions for many trades. Schwab fell nearly 10

percent, while Etrade sank 16.4 percent and TD Ameritrade nosedived 25.8

percent.

US-listed shares of Credit Suisse dropped 2.7 percent following the

resignation of chief operating officer Pierre-Olivier Bouee after an internal

investigation into the bank's decision to spy on a star banker who left for

rival UBS.

An internal probe exonerated chief executive Tidjane Thiam in the scandal,

which has shaken the bank in recent weeks.

Key figures around 2045 GMT

New York Dow: DOWN 1.3 percent at 26,573.04 (close)

New York S and P 500: DOWN 1.2 percent at 2,940.25 (close)

New York Nasdaq: DOWN 1.1 percent at 7,908.68 (close)

London FTSE 100: DOWN 0.7 percent at 7,360.32 (close)

Frankfurt DAX 30: DOWN 1.3 percent at 12,263.83 (close)

Paris CAC 40: DOWN 1.4 percent at 5,597.63 (close)

EURO STOXX 50: DOWN 1.4 percent at 3,518.25 (close)

Tokyo Nikkei 225: UP 0.6 percent at 21,885.24 (close)

Hong Kong (closed)

Shanghai (closed)

Euro/dollar: UP at $1.0935 from $1.0899 at 2050 GMT

Pound/dollar: UP at $1.2300 from $1.2289

Dollar/yen: DOWN at 107.69 yen from 108.08 yen

Brent North Sea crude: DOWN 0.6 percent at $58.89 per barrel

West Texas Intermediate: DOWN 0.8 percent at $53.62 per barrel

Source: Bangladesh Sangbad Sangstha (BSS)