China Weighs on Markets as Silver Dives Again
Concerns over China's economy and a fresh profit warning by British retailer Tesco kept global stock markets in check Monday, while silver fell further to its lowest level in over four years.
KEEPING SCORE: Following broad-based declines in Asia on the back of China worries, markets in Europe were lackluster. Germany's DAX was flat around 9,800 and France's CAC-40 was down 0.1 percent at 4,457. Britain's FTSE 100 underperformed its peers in Europe, falling 0.7 percent to 6,791 after another profit warning from Tesco. U.S stocks were set for a subdued open, with Dow futures and the broader S&P 500 futures down 0.2 percent.
CHINA WORRIES: Investors are nervous about China following a run of soft economic data that suggests growth in the world's second-largest economy is slowing. On Tuesday, HSBC publishes its closely-watched gauge of Chinese manufacturing activity.
THE QUOTE: "There's growing concern over the state of the Chinese economy," said Joao Monteiro, analyst at Valutrades.
ASIA'S DAY: The concerns over China saw the main index in Shanghai drop 1.2 percent to 1,332.22 and Hong Kong's Hang Seng fall 1.4 percent to 23,955.67. Elsewhere, Tokyo's Nikkei 225 fell 0.7 percent to 16,205 while South Korea's Kospi declined 0.7 percent to 2,039.27.
TESCO TURMOIL IN UK: Tesco was in focus Monday after the U.K. retailer revealed it had overestimated its half-year expected profit by 250 million pounds (about $409 million). Tesco, which has seen its share price plunge 10 percent, has suspended four executive and appointed independent accountants to investigate its fourth profits warning since January 2012.
CURRENCIES: The yen has been trading at six-year lows as the dollar has surged in anticipation the U.S. Federal Reserve will raise interest rates next year while the Bank of Japan maintains its easy monetary policy. On Monday the dollar was flat at 109.03 yen while the euro rose 0.2 percent to $1.2851.
SILVER'S FALL FROM GRACE: Silver continued its recent descent, falling to its lowest level since the summer of 2010. An ounce of silver was down 1.4 percent at $17.59. Precious metals, including gold, have been pressured by the recent strength of the dollar, low global inflation and generally buoyant stock markets. Gold is trading at its lowest level since the start of the year at around $1,214 an ounce.
ENERGY: Benchmark crude oil edged up 15 cents to $91.80 a barrel in electronic trading on the New York Mercantile Exchange.