World shares, oil decline as EU energy ministers to meet

Global shares fell Monday and oil prices lost about $3 a barrel as European energy ministers were set to meet to discuss Russian supply issues and sanctions.

U.S. futures advanced after a rout Friday on Wall Street.

Trading was closed for holidays in China, many other Asian markets, and Britain.

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The CAC 40 in Paris dropped 1.7% in early trading to 6,420.87. Germany’s DAX was down nearly 1.0% at 13,963.11. The future for the Dow industrials rose 0.3% while the S&P 500's was 0.2% higher.

A report showing pandemic lockdowns have hurt factory activity in China, a main regional driver of growth, was a fresh source of concern.

The monthly purchasing managers’ index, released over the weekend by China’s National Bureau of Statistics, fell to 47.4 in April, down from 49.5 in March on a 100-point scale. Numbers below 50 show activity contracting.

The COVID-19 outbreaks have impacted China’s factory activities and market demand, said the bureau’s statistician Zhao Qinghe.

Some enterprises have reduced or stopped production, with disruptions in logistics as well as the supply or raw materials and components.

Residents of Shanghai, China’s most populous city, spent most of April under lockdown. The capital, Beijing, is mass-testing millions of residents.

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Japan’s benchmark Nikkei 225 declined 0.1% to finish at 26,818.53. Tokyo trading will be closed Tuesday through Thursday for national holidays, reopening on Friday.

Australia’s S&P/ASX 200 dropped 1.2% to 7,347.00. South Korea’s Kospi shed 0.3% to 2,687.45.

In Ukraine, a first group of civilians who had been trapped for weeks inside a steel plant in Mariupol under Russian siege was expected to reach a Ukrainian-controlled city later Monday.

The EU energy ministers were to meet to discuss Russia’s decision to cut gas supplies to Bulgaria and Poland and debate a sixth round of sanctions over Moscow’s war on Ukraine.

The energy ministers were also planning to look at what steps to take if Russia ramps up its pressure by cutting gas supplies to other countries.

Ahead of the meeting, benchmark U.S. crude lost $2.98 to $101.71 a barrel in electronic trading on the New York Mercantile Exchange. It shed 67 cents to $104.69 per barrel on Friday.

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Brent crude, the international standard, fell $2.78 to $104.36 a barrel.

On Friday, steep losses for technology stocks pushed the S&P 500 down 3.6% while the tech-heavy Nasdaq Composite fell 4%, finishing April down 13.3% in its biggest monthly loss since 2008.

The Dow Jones Industrial Average dropped 2.8% and the Russell 2000 slid 2.8%.

"The reality is that sentiment around equity risk is horrible: and Bull/Bear reading shows bulls have never been worse off," Stephen Innes of SPI Asset Management said in a commentary.

"As a result, we are in an incredibly fragile market that is delivering outsized moves on shallow levels of liquidity – especially in Tech, where growth is getting slammed," Innes said.

Investors have been reviewing financial results from big tech companies, industrial firms and retailers and some disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling last week.

They’re also watching for next steps by the U.S. Federal Reserve to battle inflation. The Fed is expected to announce another round of rate hikes this week. That means higher borrowing costs at a time when inflation worries are high on the minds of investors and consumers alike.

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In currency trading, the U.S. dollar edged up to 130.08 Japanese yen from 129.83 yen. The euro cost $1.0533, inching down from $1.0546.