Stocks sink on fresh signs of China slowdown

World stocks slumped to start the week on Monday as Chinese trade data renewed fears for global growth.

Meanwhile, the British pound hit a seven-week high against the dollar as British Prime Minister Theresa May delivered an upbeat speech on the eve of a key Brexit vote which she is expected to lose, dealers said.

As earnings season kicked off, weak official Chinese trade data showed demand in China and abroad was weaker last month, something that had made stocks swoon during the final quarter of 2018.

China's exports fell 4.4% in December from a year earlier, while imports dropped 7.6%, reflecting sluggish demand at home and abroad.

"There is a concern that the global economy could slow down. The data for the last few months has supported the fact that the economy is slowing in China and around the globe," Adam Sarhan of 50 Park Investments told AFP.

"The global economy does well when China does well."

Sarhan added that the partial shutdown of the US government was also a worry for investors as it dragged into its fourth week.

"The stock market is concerned because eventually the shutdown will cause a significant slowdown on the economy," he said.

In Britain, Sterling bounced as high as $1.2879, a level last seen in late November, after May issued a last-ditch plea for lawmakers to back her European Union divorce deal on Tuesday.

A surprise for the pound?

On the other hand, the European single currency dropped to 88.96 pence, the lowest level since early December.

"We all have a duty to implement the result of the referendum," May said in an address to factory workers in Stoke, a Brexit-backing city in central England.

The embattled British leader, who is widely expected to lose the House of Commons vote by a considerable margin, said failure to deliver Brexit would be "catastrophic" for British democracy.

XTB analyst David Cheetham said there was a "nagging doubt" investors were discounting the possibility that Britain could crash out of the EU without a deal in place.

"If traders start to fear that it could realistically happen once more then the pound is vulnerable to a swift swoon lower," he said.

Meanwhile, London's benchmark FTSE 100 stocks index sank 0.9%, while Paris shed 0.4% and Frankfurt gave up 0.3%.

In Asia, Hong Kong stocks spearheaded a sell-off as profit-takers also moved in following a six-day rally.

China's customs bureau also said the trade surplus with the United States - a major source of anger for President Donald Trump - had widened by 17.2% last year as US companies rushed to buy goods ahead of more tariff hikes.

ZAR/USD
16.58
(+0.82)
ZAR/GBP
21.38
(+1.01)
ZAR/EUR
19.49
(+0.59)
ZAR/AUD
11.92
(+0.51)
ZAR/JPY
0.16
(+0.87)
Gold
1904.95
(+0.92)
Silver
23.74
(+1.72)
Platinum
897.00
(+0.75)
Brent Crude
42.12
(+1.78)
Palladium
2310.00
(+0.76)
All Share
54446.78
(+0.34)
Top 40
50159.14
(+0.23)
Financial 15
10158.72
(+0.86)
Industrial 25
73766.43
(+0.79)
Resource 10
53032.08
(-0.66)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1404 votes
It depends on how the funds are used.
73% - 9099 votes
No. We should have gotten the loan elsewhere.
16% - 2002 votes
Vote