PARIS (Reuters) – The main European stock markets corrected on Monday morning on fears of a recession in the United States in light of the latest macroeconomic indicators, while other statistics such as service activity indices will be published during the day.

In Paris, the CAC 40 lost 2.8% to 7,048.80 points at around 07:30 GMT after two sessions of sharp declines. In London, the FTSE 100 dropped 2.06% and in Frankfurt, the Dax fell by 2.91%.

The EuroStoxx 50 index fell by 3.06% and the FTSEurofirst 300 by 3.02%. The Stoxx 600, down 2.93%, fell to its lowest level since January.

Futures on Wall Street are pointing to a 1.63% decline for the Dow Jones, a 2.67% decline for the Standard & Poor’s 500 and a 4.62% decline for the Nasdaq. The latter index moved into correction territory on Friday as investors worried about the weakening of the labor market and manufacturing activity in the United States.

In Asia, stock markets suffered one of their worst sessions in years, if not decades, on Monday in the wake of widespread selling, with the Nikkei index in Tokyo plunging 12.4%, its biggest daily percentage drop since “Black Monday” on October 20, 1987, according to LSEG data.

In South Korea, a trade restriction was triggered for the first time in four years, due to the fall in the Kospi index (-8.77%).

Fear of a recession is leading to a pullback in safe-haven assets such as the yen and the Swiss franc, which have hit seven- and six-month highs respectively against the dollar, while risky assets such as bitcoin (-15.77% to $52,680) or ether (-22.5% to $2,337.11) are falling to multi-month lows.

The yield on 10-year US Treasuries fell 4.7 basis points to 3.7528%, its lowest since mid-2023, while the two-year yield rose above 10-year to 3.884%, a reversal often seen as a sign of a coming economic recession.

On the stock market, the basic resources (-3.4%) and energy (-3.78%) sectors are in sharp decline.

The first figures from the monthly indicator of services activity in Europe, while awaiting those from the United States in the afternoon, could accelerate the movement of asset sales if a deterioration in the economy is confirmed.

In values, Infineon fell by 1.86% after lowering the range of its sales forecast for the whole year. The technology sector index fell by 4.1%, with ASML (-7.42%) and STMicroelectronics (-5.64%) in particular.

Société Générale (-4.68%) did not benefit from the bank’s announcement of the sale of several of its subsidiaries while the European banking sector fell by 4%, to a low since March.

Aurubis (-7.19%) is also in the red, the leading European copper producer having reported on Monday a quarterly pre-tax profit below forecasts.

(Written by Claude Chendjou, edited by Blandine Hénault)

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