BANGKOK – World shares were mixed on Monday after US stocks fell sharply following reports showing the US economy may be suffering as consumers and businesses fret over President Donald Trump’s policies.
German shares advanced after conservatives won an election dominated by concerns about Europe’s largest economy. The DAX jumped 0.7 per cent to 22,439.17 after provisional results confirmed that mainstream conservatives led by Friedrich Merz won the national election, while a far-right party surged to become the nation’s second-largest.
In Paris, the CAC 40 shed 0.2 per cent to 8,138.47, while Britain’s FTSE 100 edged 0.1 per cent higher, to 8,669.45.
Markets were closed in Tokyo for a holiday.
In other Asian trading, Hong Kong’s Hang Seng index wavered before closing down 0.6 per cent higher at 23,341.61. The Shanghai Composite index shed 0.2 per cent to 3,373.03.
Australia’s S&P/ASX 200 gained 0.1 per cent to 8,308.20. South Korea’s Kospi lost 0.4 per cent to 2,645.27, while the Taiex in Taiwan fell 0.7 per cent. India’s Sensex also declined 0.7 per cent.
On Friday, the S&P 500 sank 1.7 per cent for its worst day in two months, closing at 6,013.13, after several weaker-than-expected reports on the US economy. The Dow Jones Industrial Average dropped 748 points, or 1.7 per cent, to 43,428.02, while the Nasdaq composite tumbled 2.2 per cent to 19,524.01.
A report from S&P Global suggested US business activity is close to stalling, with growth slowing to a 17-month low as activity unexpectedly shrank for US services businesses. Many in the survey reported pessimism over the future.
“Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Sales are reportedly being hit by the uncertainty caused by the changing political landscape, and prices are rising amid tariff-related price hikes from suppliers.”
“We have factored rising US tariffs and related countermeasures into our forecasts since December 2024, with trade weakness the primary cause of the projected slowdown in quarter- over-quarter global real GDP growth rates this year. Weaker investment is a key downside risk,” Ken Wattret, a global economist at S&P Global, said in a report.
A separate report said US consumers are bracing for higher inflation, in part because of potential tariffs that could raise prices for all kinds of imports. They’re broadly expecting prices to be 4.3 per cent higher 12 months from now, which is a big jump from their forecast of 3.3 per cent inflation last month, according to a survey by the University of Michigan.
A third report said sales of previously occupied homes were weaker last month than economists expected. Relatively high mortgage rates, along with expensive prices for homes, have been hurting sales.
Stocks of the smallest companies, whose profits can be more closely tied to the strength of the US economy than big multinational rivals, fell more than the rest of the market. The Russell 2000 index of small stocks dropped a market-leading
Akamai Technologies had the sharpest drop in the S&P 500, losing 27.1 per cent even though the cybersecurity and cloud computing company reported stronger profit for the latest quarter than analysts expected.
Better-than-expected profit reports had been helping to offset worries about stubbornly high inflation, which could prevent the Federal Reserve from delivering more relief for the economy and financial markets through lower interest rates.
The Fed has been holding its main interest rate steady after sharply cutting it through the end of last year. At their last policy meeting in January, Fed officials suggested they may stay on hold for a while given worries about how Trump’s proposed tariffs and mass deportations of migrants, along with other factors, could push upward on inflation.
While lower rates can boost the economy, they can also encourage spending that puts upward pressure on inflation.
In other dealings early Monday, US benchmark crude oil shed 9 cents to $70.31 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 4 cents to $74.01 per barrel.
The US dollar rose to 149.50 Japanese yen from 149.24 yen. The euro climbed to $1.0481 from $1.0462.
World shares are mixed as conservatives win German election
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