MILAN : Shares fell and the dollar held near highs in holiday-thinned trading on Monday, as concerns about economic growth lingered ahead of an expected U.S. rate hike this week and after data showed COVID-19 lockdowns slowed China's factory activity.
The pan-European STOXX 600 index fell 1.2 per cent, on course to snap a three-day winning streak. Japan's Nikkei fell 0.1 per cent and South Korea's KOSPI declined 0.3 per cent. That raised fears of a sharp slowdown in the second quarter that will weigh on global growth, just as central banks around the world start to tighten policy aggressively to combat inflation pressures, exacerbated this year by the war in Ukraine.
"Still, market participants are uncertain as to whether this big leap forward in the Fed's policy-tightening process will be accompanied by dovish, neutral or hawkish statements from Powell," they added in a note. U.S. equity futures bounced back on Monday, sending Nasdaq and S&P 500 e-minis up between 0.8 per cent and 0.6 per cent.
The dollar edged back towards its nearly two-decade high and the euro slipped down to $1.05, as investors prepared for the likely Fed rate hike.