(Sharecast News) – European shares extended losses on Tuesday as weak services survey data from China and the eurozone dampened sentiment.
The pan-regional Stoxx 600 index was down 0.73% with all major markets lower. Wall Street bourses were closed overnight for the Labor Day public holiday.
Output in the eurozone during August fell at its fastest rate in three years in August, with services survey data revised downwards from initial estimates and price inflation making a worrying return.
The composite PMI in the eurozone slipped for the fourth straight month to a 33-month low of 46.7 in August, from 48.6 in July, below consensus estimates and the flash reading of 47.0, according to S&P Global.
“The latest prices data were also cause for concern, as input price inflation accelerated on the month for the first time since September 2022. The average increase in prices charged for goods and services was the slowest in two-and-a-half years, but remained stronger than the long-run trend,” according to survey compiler S&P Global.
China’s services activity expanded at the slowest pace in eight months in August on weak demand, while state stimulus measures had failed to provide any lift to consumer consumption.
The Caixin/S&P services purchasing managers’ index (PMI) dropped to just 51.8 last month, down from 54.1 in July.
While any figure over 50 still indicates an expansion in activity, this was the lowest reading since December as a result of below-average new order intake. The consensus forecast was for a reading of 53.
In Australia, rates were held steady for the third consecutive month as signs that inflationary pressures were easing continued.
The cash rate was maintained at a decade-high 4.1%. Philip Lowe, who was delivering his final rate decision after seven years as the Reserve Bank of Australia’s governor, said that while inflation was still above the bank’s 2 – 3% target band, it was now falling.
In equity news, shares in Ashtead fell, despite the equipment rental group posting a record performance in its fiscal first quarter, with double-digit growth across the board, as it delivered a bullish outlook for the rest of the year.
Swiss investment manager Partners Group surged after posting higher first-half revenue and profit.
Reporting by Frank Prenesti for Sharecast.com
