European stocks hit by data signaling Chinese weakness
Europe’s main stock markets mostly fell Monday as investors examined poor Chinese trade data that signaled fresh weakness in the world’s second biggest economy, dealers said.
In late morning trade, London’s benchmark FTSE 100 index fell 0.44 percent to 7,059.10 points, with the mining sector hit hard by the weak numbers.
In the eurozone, the CAC-40 in Paris slid 0.03 percent to 5,238.9 points, while Frankfurt’s DAX 30 added 0.02 percent to 12,377 points.
China’s customs administration said exports fell by a surprising 15 percent year-on-year in March, while imports tumbled 12.7 percent.
The news weighed on the mining and resources sector in Europe, because China is a major consumer of many raw materials.
In London, BHP Billiton’s share price tumbled 2.77 percent to 1,423 pence, leading the fallers on the FTSE 100 index.
Anglo American dived 1.81 percent to 1,003.5 pence, Antofagasta dropped 2.54 percent to 996 pence and Rio Tinto shed 1.57 percent to 2,792.5 pence.
“Beijing’s brutal trade figures have sparked a sell-off in the mineral-related stocks, and the overnight announcement from China has set the pace for the growth figures that are due out later this week,” said IG analyst David Madden.
“The collapse in China’s trade balance on the month was so dramatic it left some traders wondering whether the figures were accurate, and other dealers viewed the dreadful numbers as a sign for further stimulus.”
Before the weekend, European equities hit record highs on Friday as a weaker single currency boosted companies’ exports from the eurozone, dealers said.
Across in Asia, however, markets mostly rose as the data stoked hopes for fresh easing measures in China.
Asia Shares Mostly Up, China
Data Spurs Shanghai Rally
Asian markets mostly climbed Monday, with Hong Kong advancing for an eighth straight session and Shanghai rallying after more disappointing Chinese data fueled hopes for fresh easing measures.
Wall Street provided another strong lead Friday, boosted by a string of merger announcements last week and a huge asset sale by General Electric (GE).
Shanghai surged 2.17 percent, or 87.41 points, to 4,121.71 while Hong Kong climbed 2.73 percent, or 743.95 points, to 28,016.34 on the second highest turnover ever.
Seoul gained 0.53 percent, or 11.16 points, to end at 2,098.92.
Tokyo ended marginally lower, dipping 2.17 points to 19,905.46, while Sydney eased 0.14 percent, or 8.1 points, to close at 5,960.3.
The latest China figures show the world’s number two economy continues to struggle. However, they will also reinforce investors’ expectations that authorities will unveil a new round of growthfueling policies.
Those expectations have powered a rally in Shanghai shares to seven-year highs over the past 12 months, and mainlanders are heading to Hong Kong for what they consider cheap equities. Hong Kong’s Hang Seng Index (HSI) has now climbed more than 13 percent over the past eight sessions.
Turnover on the HSI hit two successive records last week as traders north of the border made the most of a link-up between the index and Shanghai’s exchange.
While the stock connect program initially aroused little inter- est, the decision by mainland authorities last month to expand the number of fund-management firms allowed to buy in Hong Kong has seen activity surge.
“What we saw last week is likely to continue,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors, told Bloomberg Television.
The Dow climbed 0.55 percent, the S&P 500 rose 0.52 percent and the Nasdaq gained 0.43 percent.
Gold fetched US$ 1,199.90 against US$1,202.92 late Friday. In other markets: — Wellington rose 0.12 percent, or 6.96 points, to 5,854.32.
— Manila slipped 0.67 percent, or 54.23 points, to 8,073.25.
— Bangkok was closed for a public holiday.
— Mumbai rose 0.57 percent, or 165.06 points, to close at 29,044.44 points.
— Jakarta closed down 0.80 percent or 43.93 points at 5,447.41.
— Singapore gained 0.35 percent, or 12.01 points, to 3,484.39.
— Kuala Lumpur lost 2.23 points, or 0.12 percent, to close at 1,842.08.