By Georgi Kantchev 

Global stocks started the week under pressure after data showed that China's economy grew at its slowest pace in nearly three decades last year, the latest sign that the world economy is decelerating.

The Stoxx Europe 600 fell 0.3%,dragged down by the utility and financial sectors. Asian markets trimmed gains after the Chinese data release, finishing slightly higher on the day.

U.S. markets are closed Monday for Martin Luther King Jr. Day. Futures for the S&P 500 were down 0.4%.

The world's second-largest economy grew 6.6% in 2018, the slowest annual pace China has recorded since 1990, official data showed Monday. The economic downturn, which has been sharper than Beijing expected, deepened in the last months of 2018, with fourth-quarter growth rising 6.4% from a year earlier.

The Chinese figures come amid a bruising trade fight with the U.S. and, coupled with lackluster numbers for America and Europe, paint a picture of a slowing global economy.

Worries about growth hit market sentiment late last year, though stocks recovered some ground early in 2019 due to progress in the trade negotiations and reassurances by the Federal Reserve that it would adjust its pace of tightening monetary policy if the data worsens.

"The global economy and global trade are clearly slowing and that is dampening sentiment," said Richard McGuire, head of rates strategy at Rabobank.

"Investors are trying to get a clearer picture through all the headline noise out there, whether it's U.S.-China trade or Brexit. But overall, the uncertainty has a bearing on the market," Mr. McGuire said.

Later in the week, European Central Bank President Mario Draghi is expected to acknowledge the darkening outlook in the eurozone after the bank's policy meeting Thursday. In comments earlier in January, Mr. Draghi said recent data had been weaker than expected, although he argued that the eurozone probably would avoid recession.

Investors were also looking to U.K. Prime Minister Theresa May's next move on Brexit after lawmakers last week soundly rejected her plan to exit from the European Union, putting the process in jeopardy ahead of a March 29 deadline to leave. Mrs. May is scheduled to detail her "Plan B" for Brexit to parliament Monday.

The British pound wavered, recently trading up less than 0.1% against the U.S. dollar.

"The U.K. Government has made no progress at all in unearthing a solution to its impasse over the agreement to leave the EU. The pound may well still have more upside on good than downside on bad news, but there isn't any good news around," Kit Juckes, strategist at Société Générale, said in a note to clients.

Earnings were another focus for investors, with fourth-quarter results for Ford Motor Co. and International Business Machines on tap later this week.

Slightly more companies than usual have beaten analysts' earnings estimates so far, providing a source of support for the market. Around 76% of companies have reported above analyst expectations, compared with an average beat of 64%, according to data from Refinitiv. The bar is significantly lower, however, after steep downgrades to fourth-quarter and 2019 earnings forecasts in recent weeks.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

January 21, 2019 08:45 ET (13:45 GMT)

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