European stocks slip, global IT outage causes chaos

European shares have fallen as uncertainty across major economies added to headwinds for investors even as the rate easing cycle gets under way, while a global outage hit services from airlines, banks and financial services.

It has been a turbulent week in markets, with a tech sell-off sparked by deepening Sino-US trade tensions, uncertainty over US President Joe Biden’s fate in the presidential race, disappointing Chinese economic data and a lacklustre third plenum outcome casting a shadow over the global mood.

In the foreign exchange market, Tokyo’s recent bouts of intervention also kept traders on edge.

“We could just be getting a taste of things to come. And that is more turbulence,” said Matt Simpson, senior market analyst at City Index.

On Friday, major US airlines ground flights citing communications issues, while other carriers, banks and media companies around the world reported system outages were disrupting their operations.

LSEG Group’s Workspace news and data platform suffered an outage that affected user access worldwide, causing disruption across financial markets.

European stocks fell 0.6 per cent, while London stocks fell 0.7 per cent in early trading.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.6 per cent and was headed for its worst week in three months with a nearly three per cent loss.

S&P 500 futures tacked on 0.16 per cent, while Nasdaq futures gained 0.3 per cent.

Technology stocks continued to struggle in Asia, with South Korea’s tech-heavy KOSPI index and Taiwan stocks falling one per cent and two per cent, respectively.

In China, investors were left disappointed over the lack of details provided on the implementation steps for achieving economic policy goals at the conclusion of its closely watched plenum on Thursday.

Chinese officials on Friday acknowledged the sweeping list of economic goals contained “many complex contradictions”, pointing to a bumpy road ahead for policy implementation.

Chinese blue-chips were last up 0.55, though the CSI300 Real Estate index slid about two per cent, as an anaemic property sector continued to weigh on China’s growth outlook.

The euro was last at $US1.0887, having fallen 0.4 per cent in the previous session after the European Central Bank kept rates on hold as expected but left the door open to a September cut as it downgraded its view of the euro zone’s economic prospects.

The dollar was on the front foot, distancing itself from a four-month low hit earlier in the week against a basket of currencies.

Sterling eased to $US1.2934 after data showed British retail sales volume fell by more than expected in June.

The dollar was partially underpinned by strong US manufacturing data and jobless figures that did little to suggest a significant slowing in the labour market, though traders are still pricing in a September rate cut from the Federal Reserve.

The yen last traded at 157.41 per dollar, though was headed for a slight gain for the week, helped by suspected bouts of intervention by Japanese authorities to prop up the currency and as an acceleration in the core inflation last month kept alive expectations that the Bank of Japan could soon raise interest rates.

In commodities, oil prices fell. Brent crude futures eased 0.4 per cent to $US84.7 a barrel, while US crude futures slid 0.58 per cent to $US82.34 per barrel.

Gold eased 0.6 per cent, retreating from a record high of $US2,483.60 per ounce hit earlier this week on the prospect of lower global interest rates.