Volkswacht Bodensee - Global stocks down ahead of earnings, inflation data

The euro continued to head towards parity against the dollar as the European Commission said it would again cut its growth forecast for the current year and hike expectations for inflation.

"It is no longer a question of if euro-dollar will fall to one, but more a question of how quickly and will it stop there," City Index analyst Fiona Cincotta told AFP.

"With energy security concerns rising by the day in Europe, a recession seems almost impossible to avoid," the expert said.

At the same time, a strong US jobs report meant that an interest hike of a full percentage point "can't be discounted," Cincotta said.

"The diverging economic outlooks and the significantly more hawkish Fed means that euro-dollar could comfortably fall below parity," she said.

OANDA analyst, Craig Erlam, also felt it was "only a matter of time until euro-dollar hits parity.

"It shows how quickly the situation has evolved and economic pessimism has set in. Europe isn't alone on this, but the energy dynamic leaves it particularly vulnerable and a recession is increasingly looking inevitable," Erlam said.

While the European Central Bank is readying to raise interest rates for the first time in 11 years, "It's offering little support for the single currency as any hikes will simply compound the economic misery at this point," the analyst said.

- China growth fears -

The prospect of another coronavirus lockdown sparked an equities sell-off in Hong Kong and Shanghai on Monday.

Chinese tech firms took a battering after authorities fined giant Tencent and Alibaba over not properly reporting past deals.

Hong Kong-listed casino operators were also sharply lower after officials in Macau embarked on a week-long lockdown to curb its worst coronavirus outbreak.

There were also losses in Sydney, Seoul, Taipei, Manila, Mumbai, Jakarta and Wellington.

However, Tokyo rose as traders welcomed Japan's ruling bloc securing a strong win in Sunday's upper house election, held days after the assassination of former premier Shinzo Abe.

The result should provide the government with some stability, while there were also hopes for a cabinet reshuffle and economic stimulus.

Shanghai recorded more than 120 virus cases at the weekend, having seen its first one of the highly contagious BA.5 Omicron strain, forcing officials to launch another mass testing drive.

With China fixated on its zero-Covid strategy to wipe out the disease, there is increasing concern that authorities will revert to another painful lockdown. Shanghai residents only emerged from a two-month confinement in June.

There have meanwhile been new infections uncovered in other parts of the country, including Beijing.

Data this week will provide a fresh update on the economic impact of those measures, as well as similar strict controls in Beijing.

- Key figures at around 1545 GMT -

New York - Dow: DOWN 0.5 percent at 31,198.48 points

London - FTSE 100: UNCHANGED at 7,196.59 (close)

Frankfurt - DAX: DOWN 1.4 percent at 12,832.44 (close)

Paris - CAC 40: DOWN 0.6 percent at 5,996.30 (close)

EURO STOXX 50: DOWN 1.0 percent at 3,471.69

Tokyo - Nikkei 225: UP 1.1 percent at 26,812.80 (close)

Hong Kong - Hang Seng Index: DOWN 2.8 percent at 21,124.20 (close)

Shanghai - Composite: DOWN 1.3 percent at 3,313.58 (close)

West Texas Intermediate: DOWN 1.0 percent at $103.78 per barrel

Brent North Sea crude: DOWN 0.5 percent at $106.45 per barrel

Euro/dollar: DOWN at $1.0084 from $1.0183 on Friday

Pound/dollar: DOWN at $1.1903 from $1.2034

Euro/pound: UP at 84.72 pence from 84.59 pence

Dollar/yen: UP at 137.31 yen from 136.10 yen

burs-spm/bp

S.Keller--BTB