European stocks headed for an early decline alongside Asian equities as signs of weakness in China and lower US rate cut forecasts weighed on risk sentiment.
Contracts for the Euro Stoxx 50 fell, following Thursday declines for US stocks and a downbeat day in Asian equity markets that dragged a gauge of the region’s shares lower for the first time in six sessions.
The moves followed a lackluster day on Wall Street and further signs of stress in China, where home sales fell in April at a faster pace than the prior month and consumption unexpectedly slowed, providing a new warning sign for the economy.
“A-share investor sentiment dropped notably versus the prior week,” Morgan Stanley strategists led by Laura Wang said in a Friday note, referring to Chinese onshore stocks. “Weak credit and inflation data, as well as the US tariff hike announcement, renewed investor concerns regarding weak macro conditions and ongoing geopolitical friction.”
Shares in mainland China, Australia and South Korea fell, while Japanese and Hong Kong stocks edged higher. The Hang Seng Index traded near a nine-month high, as robust results supported Alibaba Group Holding Ltd. and Baidu Inc. US equity futures were little changed after a small decline for the S&P 500 and Nasdaq 100 on Thursday.
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