Eurozone PMI falls to 20-month low as recession prospect rises

Eurozone business activity fell further than expected last month, increasing the likelihood of a recession in the 19-member common currency bloc.

S&P Global’s final euro zone composite PMI (purchasing managers’ index), seen as a reliable gauge of economic health, dropped to a 20-month low of 48.1 in September from 48.9 in August, short of a preliminary estimate of 48.2. Any reading below 50 indicates contraction.

The pan-European Stoxx 600 was down 0.8% shortly before noon. Autos dropped 2.9% to lead losses as almost all sectors and major bourses slid into the red after September’s eurozone PMI reading cemented fears of a recession across the 19-member currency bloc.

The declines on Wednesday came after European markets rallied during the previous session, with the European blue chip index closing 3% higher. Travel and leisure stocks jumped 6.1% to lead gains as all sectors and major bourses closed in positive territory.