FirstFT: Global stocks suffer worst day since June 2020

Global stocks yesterday suffered their worst one-day decline since the early months of the coronavirus pandemic in 2020, as investors fret about signs of slowdowns in the world’s large economies at a time when central banks are reining in crisis-era stimulus measures.

The FTSE All-World barometer of global equities dropped 3 per cent, its sharpest fall since June 2020, and hit its lowest level since December 2020.

Worries over rising rates have been compounded by indications that growth in big global economies could be slowing. Chinese export growth fell to its lowest level in two years last month, according to data released yesterday, which followed reports last week pointing to slowdowns in the German and French manufacturing sectors.

Wall Street’s blue-chip S&P 500 index slid 3.2 per cent and the tech-focused Nasdaq Composite dropped 4.3 per cent. Europe’s regional Stoxx 600 index fell 2.9 per cent, while China’s CSI 300 fell 0.8 per cent and Tokyo’s Topix fell 2 per cent.

The price swings in US financial markets have probably been exacerbated by a decline in liquidity, the Federal Reserve reported as it warned of a “higher than normal risk” that trading conditions will suddenly deteriorate.

Thanks for reading FirstFT Asia. Here’s the rest of the day’s news — Emily

The latest from the war in Ukraine

• Russia’s Victory Day parade: In Vladimir Putin’s speech at the annual parade in Moscow’s Red Square, Russia’s president sought to justify his invasion of Ukraine by claiming his country had to defend itself against an imminent attack.

• Energy: Japan joined a pledge by other G7 countries to phase out Russian oil, while Brussels has shelved its plans to ban the EU shipping industry from carrying Russian crude.

• EU economy: The boss of Volkswagen has called for the EU to pursue a negotiated settlement to the war in Ukraine for the sake of the continent’s economy, an intervention that challenges the stance taken by European leaders.

Five more stories in the news

1. Ferdinand Marcos Jr on track to win Philippine presidential election Early results showed Ferdinand (“Bongbong”) Marcos Jr, son of the late dictator, was set to win the Philippine presidential election by a large margin, after a campaign run in tandem with Sara Duterte, the daughter of President Rodrigo Duterte.

2. Sri Lanka’s prime minister resigns as protests intensify Mahinda Rajapaksa stepped down yesterday after weeks of violent protests, leaving the government of his brother President Gotabaya Rajapaksa in turmoil amid an economic crisis that has taken the country to the brink of default.

3. Goldman Sachs pauses work on new Spacs The US bank has halted new Spac offerings, said people familiar with the matter, in another blow to blank-cheque companies as regulators close in on the once-booming market. Last year Goldman Sachs ranked as the second-biggest underwriter for special purpose acquisition companies, helping sponsors raise almost $16bn, according to data from Refinitiv.

4. Crypto market value drops by $1.6tn since November high Cryptocurrencies have shed $1.6tn in market value since hitting an all-time high seven months ago as interest rate rises send investors fleeing from the riskiest corners of global financial markets.

5. BYD’s shares drop after launch of pollution probe Shares of China’s second-biggest automaker BYD have fallen after authorities launched an investigation into claims one of the company’s factories was responsible for harmful pollutants that were causing respiratory problems in children near the plant. Investors had poured into BYD, backed by Warren Buffett’s Berkshire Hathaway, after blockbuster first-quarter results.

The day ahead

South Korea’s president-elect takes office Yoon Suk-yeol will officially take office after being elected in March. Here’s our guide on what you need to know about the new conservative leader.

Queen’s Speech at State Opening of Parliament UK prime minister Boris Johnson will put forward legislation for the third, crucial parliamentary session spanning 2022-23 in the Queen’s Speech, which will announce about 20 pieces of legislation including an economic crime bill, financial services bill and a media bill.

Earnings Bayer, Coinbase, Fox Corporation, Mitsubishi Motors, Nintendo, Nippon Steel, Pirelli, Sony and Sumitomo Corporation are among the companies reporting results on Tuesday.

FT’s Future of the Car summit, which runs through Thursday, features Tesla founder Elon Musk, who will be speaking and taking questions, along with a host of other industry leaders. Register here.

What else we’re reading

Australia’s ‘climate wars’ After years of record heatwaves, extreme droughts and wildfires, Australian voters of every stripe increasingly see climate change as a priority. Now, the pro-business, pro-environment “teal independents” could help to usher in a greener government in the May 21 vote.

Streaming services’ battle for India The country’s movie-loving, value-conscious customers have already humbled streaming godfather Netflix, which initially priced too high and had to shelve plans for India. But Amazon Prime reckons it has India figured out.

Henry Kissinger: ‘We are now living in a totally new era’ The cold war strategist discussed Russia, the Ukraine war and China at the FT Weekend Festival in Washington this past weekend. Catch up on the full transcriptof Kissinger’s interview with the FT’s Edward Luce.

Money managers in demand The industry for outsourcing investment mandates is booming as challenging markets, compliance regulations and rising costs push big asset owners to seek help. The sector has more than doubled in size since 2016 to $2.46tn in global assets under management.

• More on investment: The concept of acronym investing is coming apart, Ruchir Sharma writes. The recent unbundling of the Faangs is much like the fall of the Brics emerging markets a decade ago.

Bleisure’s moment in the sun The ugly portmanteau describes a cross between business travel and leisure, Emma Jacobs writes. It is hardly new to tack a weekend of sightseeing on to a conference, but as business travel picks up and Covid-19 curbs end, there are reasons to believe this year its time has come. Sign up to our Working It newsletter for the big ideas shaping today’s workplaces.

What to watch

Explore the best of TV and streaming this week from hard-hitting French drama Oussekine to Our Father, a nightmarish story of a doctor who played god, modern dating explored in Love Life and more.