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Global stock markets tumbled on Monday as investors reacted to the weekend's decision by Chinese monetary authorities to reduce the amount of capital banks are required to hold, a decision that fueled concerns that world economy is struggling with tariff dispute with the US
CONSERVATION: In Europe, the German DAX fell by 0.9% to 12,000, while the CAC 40 in France also fell by 0.9% to 5,310. The FTSE 100 index of the main UK stocks was 0.6% lower at 7,272. US equities were about to open as well with Dow futures and broader S & P 500 futures contracts down 0.3%. Transactions on Wall Street should be reduced as the federal government, bond markets and much of the country observe Columbus Day. However, low liquidity levels can accentuate movements in one way or another.
CHINA RATE CUT: Beijing has poured money into its cooling economy by reducing the level of reserves that banks must maintain. Economists say it should release about 1.2 trillion yuan ($ 175 billion) for loans. The central bank has asked banks to lend more to entrepreneurs. Chinese leaders are trying to support the economic growth that began to cool after tightening control of Beijing loans last year to curb the debt boom. A tariff fight with US President Donald Trump has accentuated downward pressure on growth. After a week 's holiday, the Shanghai Composite closed its first day by almost 4% less.
ANALYST Take: This suggests that other retaliatory measures against US tariffs will follow, "said James Hughes, Chief Market Analyst at AxiTrader.
US RATES: There is also a growing expectation that the US Federal Reserve will raise interest rates more sharply than markets currently expect. The change in expectations came after strong new data on employment reduced the US unemployment rate to 3.7%, its lowest level in 40 years, and comments from Fed Chairman Jerome Powell, according to which the level of US interest rates is "far away" from curbing the growth economy.
DAY OF ASIA: The Shanghai Composite Index fell 3.7% to $ 2,716.51 and the Hong Kong Hang Seng fell 1.4% to 26,201.08. Japanese markets were closed for holidays. The Sydney S & P-ASX 200 lost 1.4% to 6,100.30 and the Seoul Kospi lost 0.6% to 2,253.83. The Indian Sensex fell 0.3% to 34,267.77. Jakarta won while New Zealand, Taiwan and Singapore withdrew.
ENERGY: The benchmark US crude tumbled from $ 1.01 to $ 73.33 a barrel of electronic trading on the New York Mercantile Exchange, while Brent, used for the international oil price, dropped 1.16 $ to $ 83.
CURRENCY: The euro fell 0.4% to 1.1478 dollar, while the dollar lost 0.3% to 113.36 yen.
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