The US government reported that job creation ground to a virtual halt last month, the latest warning of a lean road ahead after the ECB’s announcement and China unveiling a target for growth that would be its slowest in three decades (JOE RAEDLE)

London (AFP) – World stock markets plunged Friday as fears over the global economy were fanned by weak US job creation figures, a European Central Bank growth forecast downgrade and data showing Chinese trade fell off a cliff last month.

A report showing US job creation ground to a virtual halt in February was just the latest warning of a lean road ahead after the ECB slashed its growth and inflation forecasts and China unveiled a growth target that would be its slowest in three decades.

Wall Street opened solidly down after the jobs announcement, following the lead of markets in Asia and Europe that were struggling with their own swathe of downbeat results.

“It’s raining buckets leading up to, and following, disappointing February payrolls report,” said Briefing.com analyst Patrick O’Hare.

US employers added just 20,000 net new positions in February, down from 311,000 in January — and far below the 173,000 economists had projected — according to a US Labor Department report.

CMC Markets analyst Michael Hewson said that while “disappointing on the headline number, (it) wasn’t a bad report with wages growth posting a new 10-year high of 3.4 percent, while the unemployment rate dropped to 3.8 percent.”

But he added “the recent rally in global equity markets appears to have run out of steam as investors start to take profits over concerns that the macro economic backdrop is much weaker than was thought”.

– ‘Selloff continues apace’ –

Asia’s markets earlier suffered sharp losses after China revealed exports plunged more than 20 percent in February, while imports were also sharply down — both badly missing expectations.

“The stock market selloff has continued apace today, with a sharp drop in Chinese exports leading to further weakness across the board,” said IG analyst Joshua Mahony.

London’s FTSE 100 index closed down 0.7 percent, while Frankfurt fell 0.5 percent and Paris shed 0.7 percent, extending Thursday’s ECB-fuelled losses.

The euro managed to rebounded slightly after hitting a near two-year low after the the ECB news on Thursday

The ECB said eurozone interest rates would be stuck around historic lows until the year’s end at best, with the central bank boss, Mario Draghi, warning the region was “coming out of, and maybe we still are in a period of continued weakness and pervasive uncertainty”.

– ‘Set up for a big week’ –

The raft of weak results came as the economic outlook has remained shrouded this year over Brexit, China’s slowdown, and the ongoing global trade war.

“It’s all set up to be a big week for sterling with little indication that (British Prime Minister) Theresa May’s Brexit deal will get through Parliament next week,” said CMC’s Hewson.

May will try to get her divorce deal over the line in the vote on Tuesday, just two and half weeks before the UK is set to exit the European Union.

“Given the current divisions in Parliament this still remains a high bar,” Hewson said, adding that Britain crashing out without a deal is “something that markets don’t currently appear to be pricing in.”

In commodities on Friday, oil prices were down more than one percent as the prospect of a global slowdown weighed on expectations for demand for the black gold.

The plunge also came as Norway said its sovereign wealth fund — the world’s largest — would divest its stakes in oil and gas.

Shares in oil giants ExxonMobil, Shell, BP and Total all fell more than one percent after the announcement, despite the Norwegian government saying the decision would not affect downstream operations such as theirs.

– Key figures at 1640 GMT –

London – FTSE 100: DOWN 0.7 percent at 7,104.31 points (close)

Frankfurt – DAX 30: DOWN 0.5 percent at 11,457.84 (close)

Paris – CAC 40: DOWN 0.7 percent at 5,231.22 (close)

EURO STOXX 50: DOWN 0.8 percent at 3,283.60

Tokyo – Nikkei 225: DOWN 2.0 percent at 21,025.56 (close)

Hong Kong – Hang Seng: DOWN 1.9 percent at 28,228.42 (close)

Shanghai – Composite: DOWN 4.4 percent at 2,969.86 (close)

New York – Dow: DOWN 0.5 percent at 25,359.15

Euro/dollar: UP at $1.1238 from $1.1193 at 2200 GMT

Dollar/yen: DOWN at 111.16 yen from 111.58 yen

Pound/dollar: DOWN at $1.303 from $1.3085

Euro/pound: UP at 86.23 pence from 85.55 pence

Oil – Brent Crude: DOWN $1.62 at $64.66 per barrel

Oil – West Texas Intermediate: DOWN 1.49 cents at $55.17

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