Stock markets downbeat on growth concerns

Stocks retreated as investors were disappointed by corporate results and worried about the global economic outlook (AFP Photo/Daniel ROLAND)

Stock markets fell Thursday on concerns about an uncertain global economic outlook as disappointing company results added weight to lingering disquiet about the China-US trade war.

With an expected US Federal Reserve interest rate cut already priced in and few other catalysts to drive buying, analysts said investors were cashing out.

The dollar was mixed, while the pound recovered from lows struck this week amid forecasts of a UK recession in the event of a no-deal Brexit.

Britain would slide into a year-long recession should it leave the European Union without a deal on future economic relations with Brussels, the government's official forecaster said Thursday.

Share price losses in much of Europe and Asia on Thursday meanwhile had followed a negative lead from Wall Street overnight.

On Thursday, trading in New York left the Dow Jones Industrial Average down by an additional 0.2 percent at the opening bell.

Market analyst Fawad Razaqzada remarked that concern about the global economy has been offset so far by central banks indicating they would trim interest rates, if they had not already done so.

"But unless growth starts to pick up, central banks’ actions will only help to delay the inevitable: a sizeable correction," he predicted.

Shares in Netflix plunged more than 9 percent after its quarterly update, released after the market closed on Wednesday, showed weaker-than-expected subscriber growth for the streaming television sector leader.

The corporate earnings report season has produced "the tough start that many anticipated," said Craig Erlam, analyst at Oanda trading group.

"Netflix became the latest company... to face an investor backlash as subscribers rose at a slower rate than expected and significantly disappointed in its home market.

"While the company attributed this to price hikes, the increasing competition in the area is a major cause of concern for investors who have fled in numbers (at) the first excuse, it seems."

Tokyo led stock market losses Thursday, sinking two percent as it was hit by a stronger yen and data showing another drop in exports owing to falling demand and global trade uncertainty.

Energy firms tracked their US counterparts lower following another steep drop in oil prices Wednesday that came after government data showing a pick-up in US gasoline inventories.

The figures represent the weakest demand in five years, analysts said.

"Gasoline consumption is painfully weak given US consumers are in peak driving season, which will be invariably seen as the Grim Reaper of sorts," said Stephen Innes at Vanguard Markets.

"If we put this data set in the context of slowing China second-quarter GDP, where consumption was the most significant drag, the numbers do suggest that the global economic slowdown is being echoed through weaker global demand data. Definitely a bearish signal for oil demand."

Oil prices were softer again on Thursday following a sharp sell-off on Wednesday.

- Key figures around 1330 GMT -

London - FTSE 100: DOWN 0.5 percent at 7,500.42 points

Frankfurt - DAX 30: DOWN 0.7 percent at 12,253.10

Paris - CAC 40: DOWN 0.1 percent at 5,564.11

EURO STOXX 50: DOWN 0.3 percent at 3,490.06

Tokyo - Nikkei 225: DOWN 2.0 percent at 21,046.24 (close)

Hong Kong - Hang Seng: DOWN 0.5 percent at 28,461.66 (close)

Shanghai - Composite: DOWN 1.0 percent at 2,901.18 (close)

New York - Dow: DOWN 0.4 percent at 27,219.85 (close)

Pound/dollar: UP at $1.2473 from $1.2431 at 2050 GMT

Pound/euro: DOWN at 89.95 pence from 90.27 pence

Euro/dollar: DOWN at $1.1215 from $1.1222

Dollar/yen: DOWN at 107.96 yen from 108.11 yen

Brent North Sea crude: DOWN 12 cents percent at $63.54 per barrel

West Texas Intermediate: DOWN 24 cents at $55.54 per barrel