* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* MSCI All Country World Index down 0.1%
* Dollar steadies close to two-year highs
* Wall Street futures down, VIX hits highest since Sep. 5
* WTO to announce U.S.-EU aircraft dispute decision at 1400
By Ritvik Carvalho
LONDON, Oct 2 (Reuters) - A major global share index hit its
lowest level in a month on Wednesday on fears the fallout from
the U.S.-China trade war is spreading to the U.S. economy and
could further hurt global growth.
The dollar .DXY steadied, having earlier been knocked off
its highest levels in more than two years following data on
Tuesday that showed a measure of U.S. manufacturing activity
falling to its lowest in more than 10 years.
The index that measures the greenback against a basket of
peers was up 0.14%.
A slowdown in U.S. economic growth would remove one of the
few remaining bright spots in the global economy and come just
as Europe is seen as close to falling into recession.
MSCI's gauge of stocks across the globe .MIWD00000PUS ,
covering 49 markets, dipped 0.4% to its lowest since Sept. 4,
after shedding 0.83% in the previous session.
European shares fell to their lowest in a month, with London
stocks lagging the most. The pan-European STOXX 600 index
.STOXX was down 1.6%. .EU
The FTSE 100 index .FTSE slipped 2%, the largest drop
across European regions, with the British pound also shedding
0.4% to the dollar. GBP=D3 GBP/
Adding to investor anxieties, European companies looked set
for their worst quarterly earnings in three years as revenue
drops for the first time since early 2018, according to the
latest Refinitiv data. On Wall Street on Tuesday, the S&P 500 .SPX lost 1.23% to
hit four-week lows. Selling was triggered after the Institute
for Supply Management's (ISM) index of factory activity, one of
the most closely watched data on U.S. manufacturing, dropped to
the lowest level since June 2009. Markets had been expecting the index to rise back above the
50.0 mark denoting growth.
"Historically, equity returns are worst when the ISM
manufacturing drops from levels below the 50 threshold," Patrik
Lang, head of equity research at Julius Baer.
"Uncertainty around the U.S.-China trade war is obviously
the main reason for the weakness, with companies exposed to
global trade increasingly putting off investment decisions."
The World Trade Organization said it would publish at 1400
GMT its decision on a U.S. request to take action against the
European Union in a long-running aircraft subsidy dispute.
U.S. stocks futures were sharply lower. ESc1 NQc1 The
VIX volatility index - also known as Wall Street's "fear gauge"
.VIX rose to its highest level since Sept. 3.
In Asia, MSCI's ex-Japan Asia-Pacific shares index
.MIAPJ0000PUS dropped 0.8%, with Australian shares .AXJO
falling 1.5% and South Korean shares shedding 1.95%. Japan's
Nikkei .N225 slid 0.5%. China markets are closed for a
one-week holiday.
Hong Kong's Hang Seng index .HSI was down 0.3% after a
market holiday the previous day. The index fell as much as 1.2%
in early trade. On Tuesday, Hong Kong police shot a teenage
protester, the first to be hit by live ammunition in almost four
months of unrest in the Chinese-ruled city. Adding to tensions in Asia, North Korea launched at least
one more projectile on Wednesday, a day after it announced it
will hold working-level talks with the United States at the
weekend. Elsewhere in currencies, the yen rose to 107.71 yen per
dollar JPY= , from Tuesday's low of 108.47.
The euro was flat at $1.09305 EUR= .
Euro zone bond yields inched up after another speech from
outgoing ECB chief Mario Draghi calling for fiscal stimulus to
boost the region's sluggish economy. GVD/EUR
Gold rose to $1,486.46 per ounce XAU= from a two-month low
of $1,459.50 hit on Tuesday on the back of a robust U.S. dollar.
Oil prices were mixed as Brent crude extended losses partly
in response to weaker stock markets, but U.S. crude rose
slightly after industry data showed an unexpected fall in
inventories in the United States. O/R
Brent crude LCOc1 futures were last flat at $58.89 a
barrel, after hitting a four-week low of $58.41 on Tuesday,
while U.S. West Texas Intermediate (WTI) crude CLc1 gained
0.41% to $53.84 per barrel after hitting a one-month low of
$53.05.
S&P 500 vs. U.S. ISM PMI https://tmsnrt.rs/2mPG3Bo
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