GLOBAL stocks fell yesterday after weak trade data added to growth worries, while an Italian windfall tax on lenders saw European bank shares plummet.

China’s latest trade data showed the biggest fall in exports for more than three years, while the US trade deficit narrowed on a bigger pullback in imports than exports, according to government data released yesterday.

“The key takeaway from the (US) report is the lack of growth in exports and imports, which is indicative of weaker demand overall at home and abroad,” said analyst Patrick O’Hare of Briefing.com.

Moody’s meanwhile downgraded 10 regional banks and placed another six US lenders on watch for a possible downgrade, citing the rising costs of bank deposits and a worsening outlook for credit quality.

All three major US indices were in the red the entire day. 

The Dow Jones Industrial Average finished at 35,314.49, down 0.5%, but more than 300 points above session lows.

“The initial selling was driven primarily by news of the Moody’s downgrades,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research

“But the major market indexes finished well above earlier lows as bargain hunters stepped in. Health care stocks led the markets all day.”

European markets were hit following news of a windfall tax adopted by Italian Prime Minister Giorgia Meloni’s ministers late Monday.

Milan’s stock market closed 2.1% lower, while share prices of Italian banks Intesa Sanpaolo to Unicredit and Monte dei Paschi di Siena lost between five and 11%. 

Fallout spread to French and German banks, with Credit Agricole down 2.5% at closing in Paris and Commerzbank losing 3.3% in Frankfurt. 

The Italian government was “using part of the banks’ billion-dollar profits to help families and businesses affected by rising interest rates,” Deputy Prime Minister Matteo Salvini said on X, formerly known as Twitter. 

Analysts at Banca Akros said the market was responding negatively to “this unexpected bad news,” estimating that banks’ earnings per share would fall by an average of 7%. 

Key figures around 2040 GMT

New York - Dow: DOWN 0.5% at 35,314.49 (close)

New York - S&P 500: DOWN 0.4% at 4,499.38 (close)

New York - Nasdaq: DOWN 0.8% at 13,884.32 (close)

London - FTSE 100: DOWN 0.4% at 7,527.42 (close)

Frankfurt - DAX: DOWN 1.1% at 15,774.93 (close)

Paris - CAC 40: DOWN 0.7% at 7,269.47 (close)

EURO STOXX 50: DOWN 1.1% at 4,288.85 (close)

Tokyo - Nikkei 225: UP 0.4% at 32,377.29 (close)

Hong Kong - Hang Seng Index: DOWN 1.8% at 19,184.17 (close)

Shanghai - Composite: DOWN 0.3% at 3,260.62 (close)

Euro/dollar: DOWN at US$1.0957 from US$1.1002 on Monday

Pound/dollar: DOWN at US$1.2745 from US$1.2784 

Euro/pound: DOWN at 85.95 from 86.06 pence 

Dollar/yen: UP at  ¥143.40 from  ¥142.50

West Texas Intermediate: UP 1.2% at US$82.92 per barrel

Brent North Sea crude: UP 1.0% at US$86.17 per barrel – AFP, August 9, 2023.