European shares fall on growth worries, Brexit doubts

A man looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo Friday, March 22, 2019. Asian markets were mostly lower on Friday as investors mulled over the possibility of a trade deal between the U.S. and China in the near future, ahead of the continuation of talks in Beijing next week. (AP Photo/Eugene Hoshiko)

SINGAPORE – Shares fell in Europe on Friday after preliminary surveys showed that manufacturing in Germany, France and the wider eurozone had slowed in March. News that the European Union offered to only briefly extend the Brexit deadline added to uncertainty.

Germany’s DAX lost 0.6 percent to 11,478.71 and the CAC 40 in France gave up 0.8 percent to 5,337.07. Britain’s FTSE 100 shed 0.8 percent to 7,300.00.

European Union leaders have agreed to delay Brexit until May 22, the eve of the EU elections, instead of next Friday as previously planned.

There’s a catch: British Prime Minister Theresa May will have to persuade Parliament to endorse a twice-rejected deal. If not, the country will have until April 12 to choose a new path. May had asked for an extension until June 30.

“In light of the gridlock between a deal not accepted, the lack of options for revision and a looming deadline, the risk for a hard Brexit amplifies,” Jingyi Pan of IG said in a market commentary.

The preliminary Markit manufacturing purchasing managers’ index for Germany, which was released on Friday, fell to 44.7 in March from 47.6 in the previous month. In France, the reading fell to 49.8 from 51.5 in February. That for the wider eurozone also retreated to 47.6 from 49.3.

Readings for services in all three surveys fell too. Numbers below 50 indicate contraction on the index’s 100-point scale.

This follows the Federal Reserve’s announcement that it no longer intends to raise interest rates this year. The future contract for the Dow Jones Industrial Average was 0.5 percent lower at 25,887.00. That for the broad S&P 500 index also lost 0.5 percent, to 2,849.20.

U.S. and Chinese officials will meet in Beijing next Thursday and Friday for high-level trade talks, aimed at ending a tariffs battle between the world’s two biggest economies. China’s commerce ministry spokesman Gao Feng said it would mark the eighth round of negotiations between both sides. He added that Chinese Vice Premier Liu He will meet with officials in Washington in early April.

Bloomberg reported Friday that officials have made progress on a wide-ranging trade agreement through telephone calls and video conferencing. But, it said that U.S. officials were downplaying the possibility of an imminent deal with China, citing people familiar with the negotiations.

Asian indexes reversed early losses on optimism surrounding the talks. The Shanghai Composite index, which gave up 1 percent in early trading, finished 0.1 percent higher at 3,104.15. The Kospi in South Korea rose 0.1 percent to 2,186.95 and Australia’s S&P ASX 200 gained 0.5 percent to 6,195.20.

Japan’s Nikkei 225 index, reopening after a market holiday, edged 0.1 percent higher to 21,627.34, even after a report said inflation slowed slightly in February. The country’s core consumer price index rose 0.7 percent from a year earlier, compared with January’s 0.8 percent gain.

Hong Kong’s Hang Seng added 0.1 percent at 29,113.36. Shares rose in Taiwan and in most of Southeast Asia.

In other trading, benchmark U.S. crude oil lost 42 cents to $59.56 per barrel in electronic trading on the New York Mercantile Exchange. It dropped 25 cents to $59.98 per barrel on Thursday. The contract closed above $60 per barrel on Wednesday for the first time since November.

Brent crude dropped 52 cents to $67.34 per barrel on Friday. It gave up 64 cents to $67.77 per barrel in London.

The dollar eased to 110.50 yen from 110.81 yen late Thursday. The euro weakened to $1.1301 from $1.1374, and the British pound retreated to $1.3086 from $1.3106. / gsg