by On Monday, US stock indexes recorded declines, as did most global markets, after data showed a faltering in China’s economic recovery.
This fueled worries of an economic slowdown in the second-largest economy in the world.
China’s scenario and stock performance
The central bank in China unexpectedly reduced its key lending rates in order to give demand a boost, as data showed the country’s economy slowing down unexpectedly in July.
The property crisis in China and Beijing’s zero COVID policy appeared to have taken a toll on retail and factory activity in the month.
There was a more than 1% decline in the US-listed shares of Chinese internet giant Baidu Inc. and e-commerce giant Alibaba Group Holding Ltd.
Early trading saw technology and megacap growth stocks remain mixed, while a 1.1% drop was seen in banks after recording gains for six weeks consecutively.
Market analysts said that investors have finally hit pause, after experiencing a rally recently from the lows last seen in June.
Of the 11 major sectors of the S&P 500 index, energy stocks were leading losses, with crude prices declining because of worries about slowing Chinese demand, as the country is the largest crude importer.
There was a fall between 3.7% and 5.8% of oil stocks of Marathon Oil Corp, Halliburton Corp, Chevron Corp, and Exxon Mobil Corp.
Stock indexes
There was a 0.41% decline in the Dow Jones Industrial Average by 9:38 a.m. ET, which was a loss of 139.55 points to reach 33,621.50.
A 0.41% loss was also seen in the S&P 500 which saw it come down by 17.72 points to reach 4,262.43 points.
As for the Nasdaq Composite, it had recorded a fall of 0.09%, which saw it reduce by 11.91 points to reach 13,035.27.
The last few weeks had seen a rally on Wall Street, with the benchmark S&P 500 index recouping almost half of its losses in the year.
This was because markets had become optimistic after data showed that a soft landing could be achieved by the US Federal Reserve.
Other factors
Friday had seen the Nasdaq and the S&P 500 post their fourth consecutive weekly gains, even as officials of the Fed pushed back on expectations about ending the aggressive rate hikes earlier than expected.
Economists had issued a warning that inflation could make a comeback in the next few months. In other news, the decision of delisting five state-owned enterprises of China from the NYSE was announced.
Advisers and analysts were optimistic that this could end a dispute, which is almost a decade old, as Beijing could reach out to the US for an audit deal.
The shares of the five Chinese companies listed in the US extended their declines on Friday, as they fell between 2.2% and 5.1%.
The companies include Sinopec, China Life Insurance Co Ltd, Sinopec Shanghai Petrochemical Co Ltd, PetroChina Co Ltd, and Aluminum Corp of China Ltd.
There were 29 new 52-week lows and 2 new highs on the S&P 500 index, while Nasdaq saw 9 new lows and 19 new highs.
