Stock markets watch retailers’ results for further cue

After registering their worst week in six, stock markets will brace themselves for further signs of weakness in the economic recovery this week as earnings from key retailers and a smattering of secondary economic reports are expected.

Investors will watch closely US industrial production data, housing starts and Producer Price Index figures due on Tuesday.

Markets will also seek direction from the earnings reports of several big retailers this week including Wal-Mart, Home Depot, Lowe's and Target. Computer makers Hewlett-Packard and Dell are also scheduled to report their earnings.

On Friday, the Nasdaq ended the week down 5%, while the Dow Jones fell 3.3% and the S&P 500 slid 3.8% after tepid consumer and retail sales data failed to revive investor confidence. The sell-off drove stocks back into negative territory for the year.

In Europe, banking stocks led equities lower last week as mounting concerns among investors about the global recovery were only partly assuaged by Friday’s robust eurozone growth data.

The pan-European FTSE Eurofirst 300 index ended at 1,045, up 0.3% on Friday but down 1.1% on the week. The Xetra Dax index in Frankfurt declined from a near two-year closing high on Monday to end the week with a loss of 2.4%, its biggest drop in six weeks.

Asian stocks saw their first week of losses in six weeks after global growth concerns were revived and Japanese shares took a heavy battering as policymakers fretted over the strengthening yen.

Over the week, the FTSE Asia-Pacific index sank 3.2% with Tokyo’s Nikkei 225 Average the worst performer among the leading Asian indices, losing 4% to 9,253.46. Hong Kong’s Hang Seng index plunged 2.8% to 21,071 as real estate investors faced concerns that the territory’s government would introduce measures to cool surging home prices.

The Shanghai Composite index slipped 1.9% to 2,607 in a volatile week as investors considered whether a raft of disappointing data from rising inflation to weaker industrial production growth would push Beijing towards easing measures.