Stock markets were sharply lower yesterday after worse-than-expected US data revived worries about the impact of the trade war on the global economy. Asian markets were weaker overnight and Europe tumbled, with London shedding more than 2.4 per cent as investors took flight on news that US manufacturing activity fell to its lowest level since June 2009.

New York opened down as a result, with the Dow and the high-tech NASDDAQ off nearly one per cent each after a report showing hiring slowed sharply in September while a blockbuster increase originally reported for August was also revised down.

The data showed “the job market has shown signs of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

The jobs data came ahead of an all-important government employment report due out tomorrow as dealers look for signals on the US Federal Reserve’s interest rate plans, while the corporate earning season is also about to get underway.

The Institute for Supply Management (ISM) pointed to trade conflicts as the biggest headwind facing the US economy.

The ISM data pointed to the impact of the China-US trade war and could put pressure on US President Donald Trump to push through an agreement with Beijing. Top-level talks are planned for later this month.

The British pound was meanwhile pressured against the dollar as Prime Minister Boris Johnson prepared to submit his final offer for a new Brexit deal to Brussels.