European Shares Set To Open Sharply Lower On Waning Risk Appetite

(RTTNews) - European stocks are poised for steep losses on Monday as worries over a possible U.S. recession as well as heightened tensions in the Middle East sapped investors' appetite for risk.

Tech stocks could be in focus after reports suggested that Warren Buffett's Berkshire Hathaway dumped nearly half of its stake in iPhone maker Apple in the first six months of 2024.

The week ahead is relatively quiet week in terms of U.S. economic data. The July ISM Services PMI is due later in the day while San Francisco Fed President Mary Daly will be speaking at the Hawaii Executive Collaborative after the closing bell.

In Europe, PMI readings across the euro area and the Sentix survey results may attract investor attention.

Elsewhere, China's service sector growth accelerated in July on faster growth in new business inflows, data published by S&P Global showed earlier today.

Asian markets were deep in the red, with Japan's Nikkei and South Korea's Kospi average plummeting 8-10 percent as a global rout deepened.

Nasdaq 100 futures extended loss to more than 3 percent following a volatile week for Wall Street, in which the tech-heavy index dropped into correction territory amid concerns that the U.S. Federal Reserve has made a serious error in keeping rates too high for too long and could lead the U.S. economy into a recession.

China's yuan leapt to a seven-month high as the Japanese yen extended its winning streak for the fifth successive session, surging past 145 per dollar for the first time since January.

The U.S. dollar dipped on recession fears while bonds rallied on expectations of deeper interest-rate cuts by the Fed.

Gold edged up slightly on safe-haven demand while oil prices hovered near eight-month lows despite escalating Middle East tensions after Iran vowed 'revenge' over killing of Hamas chief.

U.S. stocks tumbled on Friday as a weak July jobs report as well as disappointing earnings from the likes of Intel and Amazon ignited worries that the economy could be falling into a recession under the weight of the Federal Reserve's policy of high interest rates.

The 10-year Treasury yield fell to its lowest since December as data showed nonfarm payrolls grew by just 114,000 last month, down from a downwardly revised 179,000 jobs in June and below the 185,000 expected by economists. The unemployment rate increased to 4.3 percent, the highest since October 2021.

The tech-heavy Nasdaq Composite plunged 2.4 percent to its lowest closing level in two months, the S&P 500 shed 1.8 percent to hit a nearly two-month closing low and the Dow dipped 1.5 percent to snap a four-week winning streak.

European stocks fell on Friday to extend losses from the previous session as worries about weakening U.S. growth exacerbated a rout in tech shares.

The pan-European STOXX 600 plummeted 2.7 percent, hitting an over three-month low. The German DAX lost 2.3 percent, France's CAC 40 gave up 1.6 percent and the U.K.'s FTSE 100 declined 1.3 percent.