World Shares Mostly Lower After US Manufacturing Slips in May
(AP) -- Shares in Europe and Asia were mostly lower on Tuesday after a report showed that U.S. manufacturing contracted in May.
Oil prices fell more than $1 a barrel and U.S. futures also declined.
India's Sensex dropped as much as 8% as investors who had bought shares after exit polls showed Prime Minister Narendra Modi winning a third term sold to lock in profits.
By mid-afternoon, the Sensex in Mumbai was down 5.7% at 72,079.05 as the vote count for the country's six-week-long national election appeared to show a lower than expected seat count for Modi's party, although his National Democratic Alliance was comfortably leading its closest rival.
In early European trading, Germany's DAX fell 1.2% to 18,440.00 and the CAC 40 in Paris lost 0.9%, to 7,929.77. Britain's FTSE 100 declined 0.5% to 8,224.34.
The futures for the S&P 500 and the Dow Jones Industrial Average were down 0.5%.
The U.S. dollar weakened as doubts about the U.S. economy raised expectations that the Federal Reserve will cut rates this year. The dollar slipped to 154.76 Japanese yen from 156.10 yen. The euro slipped to $1.0868 from $1.0904.
Elsewhere, Japan's Nikkei 225 index lost 0.2% to 38,837.46 and the Kospi in Seoul gave up 0.8% to 2,662.10.
Chinese shares recouped early losses amid reports that the property market might be stabilizing, with Hong Kong's Hang Seng up 0.2% at 18,444.11. The Shanghai Composite index rose 0.4% to 3,091.20.
Australia's S&P/ASX 200 shed 0.3% to 7,737.10. Taiwan's Taiex lost 0.8%.
On Monday, U.S. stocks drifted to a mixed finish.
The S&P 500 edged 0.1% higher and the Dow dropped 0.3%. The Nasdaq composite rose 0.6%.
Treasury yields slid after the report by the Institute for Supply Management showed U.S. manufacturing shrank in May for the 18th time in 19 months. High interest rates meant to get high inflation under control have hit manufacturing especially hard, sapping demand for imports from Asia.
Still, analysts questioned the significance of the report, given that the indicator has been declining for most of the past two years.
"So, why such a distinct wave of U.S. pessimism this time? Was it a manufactured excuse to take profits? Or is there a deeper cause for concern beneath the hood?" Tan Jing Yi of Mizuho Bank said in commentary. "We suspect it is a bit of both."
The yield on the 10-year Treasury fell to 4.39% from 4.50% late Friday.
This week has several other high-profile economic reports that could send yields on additional sharp swings.
On Tuesday, the U.S. government will show how many job openings employers were advertising at the end of April. And on Friday, it will give the latest monthly update on overall growth for jobs and workers' wages.
Stocks of companies whose profits are most closely tied to the strength of the economy dropped to the market's worst losses. That included the oil-and-gas industry, as the price of crude tumbled on worries about weaker demand growth for fuel.
Halliburton dropped 5.3%, and Exxon Mobil fell 2.4%. They sank as the price of a barrel of U.S. oil dropped 3.5%. Brent crude, the international standard, lost a similar amount despite moves over the weekend by Saudi Arabia and other oil-producing countries meant to prop up its price.
U.S. benchmark crude oil lost $1.53 to $72.69 per barrel in electronic trading on the New York Mercantile Exchange early Tuesday.
Brent crude, the international standard, gave up $1.38 to $76.98 per barrel.