European shares fell for a third straight session to hit a nine-month low, following more bad news about the US economy.
Figures show manufacturing grew at its slowest pace in two years last month as new orders contracted, prompting renewed fears about the speed of the global recovery. Compounding the pessimism are concerns about the impact on growth of spending cuts in the US debt deal that is making its way through Congress. The lower house has approved the plan to raise America’s debt ceiling.
The deal includes more than two trillion dollars’ worth of spending cuts but no tax cuts. The Senate is to vote on it on Tuesday evening. Despite its approval by the lower house of Congress, investors remain concerned that Washington could still lose its triple-A credit rating.
Asian shares also fell, amid speculation that Tokyo may intervene to curb the strong yen.