European equities downplay weakness in Asia

This followed a fall in markets in the Asia-Pacific region, where Chinese equities in particular were hit again. The Shanghai Composite Index fell 2.9% and the Shenzhen Composite Index 2.7%. The other main Asian indices also lost ground, although only Chinese indices fell by more than 1%.

Brent, the international benchmark for the oil sector, fell below $ 80 a barrel for the first time in almost a month. Earlier in October, the benchmark rose above the $ 85-a-barrel level for the first time in about four years, raising concerns about its impact on inflation and some emerging markets.

Asian losses came on the heels of a dip in US stocks on Wednesday night as the S & P 500 closed eight of the last 10 trading days. In futures, the index was about to open, down 0.2%, as was the Dow Jones Industrial Average.

These measures were taken in a context of recent market volatility, with investors increasingly concerned about rising bond yields, the state of US-China trade relations, and global growth.

The Chinese yuan was down against the US dollar, reaching its lowest level in 21 months, after US Treasury Secretary Steven Mnuchin criticized Beijing's "lack of monetary transparency," saying its monetary practices were "significant challenges for a fair and balanced trade."

While Mr Mnuchin did not stop formally calling China "currency manipulator", this decision came after months of strong rhetoric between the Trump and Xi administrations. Washington also announced that it was pulling out of a 144-year-old postal treaty with Beijing, which was helping Chinese retailers.

In 2015 and 2016, the weakness of the yuan caused capital flight from China and a sharp drop in domestic shares.

The WSJ Dollar Index, which measures the currency against a basket of 16 others, rose 0.1% for the last time, rising to 4.6% in 2018.

Although there was no immediate catalyst for Thursday's sale in China, some analysts pointed out that the persistent slowdown in credit growth in the country was the main weakness of its equity market.

"This is the most important factor behind all the difficulties of the financial market and the real economy this year," said a Macquarie economist in a note.

Fears of slower growth in the world's second-largest economy have pushed investors to focus more on the Chinese economy's numbers, and assets could suffer more if analysts' forecasts of slower growth third quarter of 2018 were accurate.

Economists polled by the Wall Street Journal are forecasting growth of 6.6% against 6.7% in the second quarter, analysts expecting more blurred data in the sectors of production and consumption in China.

"People are worried that the slowdown in China is more real than in 2015," said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. "Some companies, like

Apple

and Louis Vuitton, also talk about slowing Chinese demand. "

Elsewhere, investors were on the lookout for new signs of political conflict in Europe. The negotiations for the exit of the European Union from the United Kingdom did not seem to be over and the Italian budget negotiations with the European legislators were slow in coming.

In commodities, the price of gold remained unchanged at $ 1,222.34 troy ounce.

-Mike Bird contributed to this article.

Write to David Hodari at [email protected]