LONDON: Eurozone stock markets fell Wednesday as concern about slow growth outweighed the impact of radical new ECB stimulus measures aimed at boosting the bloc’s economy.
A worried World Bank slashed its growth forecast for the global economy Tuesday, saying advanced economies were rebounding more slowly than expected and that low commodity prices continued to hurt other countries.
Meanwhile official data released Wednesday showed that China’s imports decreased in May, although at the slowest pace in 19 months, in a possible sign domestic demand in the world’s second-largest economy may be recovering.
The Asian country is a key driver of world growth and its demand for commodities has enormous implications for resource-rich nations from Australia to Nigeria.
Frankfurt’s DAX 30 stocks index dropped 0.7 percent and the CAC 40 in Paris slid 0.6 percent.
Outside the eurozone, London’s FTSE 100 index added 0.3 percent.
The European Central Bank stepped into uncharted territory Wednesday when it began to buy bonds issued by companies, in a bid to also kickstart eurozone inflation.
The hope is that the companies will use the money to invest, thereby stimulating growth, creating jobs and helping push up prices.
Slow eurozone growth has seen inflation slide into negative territory, threatening a dangerous downward spiral of falling prices and wages.
“The European market seems to be still concerned about the health of the global economy,” said market analyst Yoav Nizard and currency broker FXCM.
“The rise in oil prices didn’t manage to stop the contraction of Chinese imports and exports in May nor the fragility of the US jobs market which has thrown into doubt the Federal Reserve’s calendar for tighteneing monetary policy,” he added.
Disappointing May jobs data last week upended expectations of an increase in US interest rates in June or July, leading to a slump in the dollar, which continued Wednesday.
The pound, which has come under pressure in volatile trading ahead of the June 23 referendum on Britain’s membership of the European Union, meanwhile won support from unexpectedly strong British manufacturing data, traders said.
