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RBA rate cut and China data weighs on US market
Wednesday, 4 May 2016 09:10:53 | Sue Lannin
US stocks fell as weak Chinese data revived worries about slowing global growth. (Reuters)
US stocks lost ground overnight after economic data from China and Europe worried investors and another fall in the price of oil hurt energy shares.
The surprise interest rate cut by the Reserve Bank of Australia also shook confidence.
Factory production in China contracted for the 14th month in a row according to the Caixin/Markit Purchasing Managers Index, which fell to 49.4 in April from 49.7 in March.
A figure below 50 indicates contraction.
The Dow Jones Index fell 0.78 per cent or 140 points to 17,751.
The S&P 500 fell 18 points to 2,064, and the Nasdaq lost 54 points to 4,763.
Europe was also hit by the global jitters as factory production in the UK fell in April to the lowest level in three years.
In London the FTSE 100 fell 56 points or nearly 1 per cent to 6,186 as mining stocks and HSBC dropped.
It reported net profit for the first quarter fell to $US4.3 billion from $US5.26 billion for the same time last year because of share market volatility.
HSBC took a loan impairment charge of $US1.1 billion on loan losses from the resources industry but the bank maintained its progressive dividend policy, keeping its dividend unchanged at $US0.10 a share.
Local shares lose early ground
The local share market lost ground in early trade, pulled down by resource stocks after falls in commodity prices.
About 10.20am, the All Ordinaries Index was down nearly 1 per cent or 48 points to 5,367.
The ASX 200 had dropped 51 points to 5,301.
The Australian dollar had fallen about two US cents since Tuesday afternoon to about 75 US cents.
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