Emerging Stocks Decline After China Industrial Profits Slump

28 Sep 2015 | Author: | No comments yet »

Asian stocks swing as investors await China data; Japanese shares retreat.

BEIJING (AP) — Global stocks were mostly lower Monday following Wall Street’s loss last week as investors looked ahead to Chinese and U.S. economic data.Emerging-market stocks fell, extending the biggest weekly drop in five weeks, as a slump in Chinese industrial companies’ profits and prospects of higher U.S. interest rates curbed demand for riskier assets.Asian stocks fluctuated, with the regional benchmark index on course for its worst quarter in four years, as investors awaited data on Chinese industrial profits.

European shares were lower in early trading Monday — Germany’s DAX index was 1.3% lower, France’s CAC 40 was down 1.7%, and Britain’s FTSE 100 lost 1.4%. AngloGold Ashanti Ltd. sank 2.7 percent in Johannesburg to lead raw-material producers lower after the Bloomberg Commodity Index halted a two-day gain. Investors concerned that China’s economic downturn might deepen were looking ahead to purchasing managers indexes due Thursday for manufacturing and service industries.

Markets in Hong Kong, Taiwan and South Korea are closed for holidays Monday, while mainland China will be shut from Thursday for a week-long break. “Everyone is super-sensitive to China at the moment,” Chris Weston, chief market strategist at IG Ltd, told Bloomberg TV. “I’m really specifically looking at US data and how that drives implied probability around Fed pricing” for its first rate increase. Analysts say they see no signs the U.S. labor market is weakening after the Commerce Department raised its estimate of economic growth in the April-June quarter. US house speaker John Boehner will resign from Congress at the end of October, following clashes with conservative members of his Republican conference. Stocks ended last week on a mixed note despite a big early rally Friday, after Federal Reserve Chair Janet Yellen suggested in a speech late Thursday that global economic weakness won’t be significant enough to alter the central bank’s plan to raise its key short-term rate from near zero by December. U.S. data Friday showed the world’s largest economy grew more than previously forecast in the second quarter, a sign that the country may be able to withstand higher borrowing costs.

For some traders, the move reduces the likelihood of a government shutdown as soon as October, while raising the specter of a stalemate later in 2015. THE QUOTE: “Investor attention will turn to the macro this week,” said Michael McCarthy of CMC Markets in a report. “The big news will flow from China and the USA. On Friday, U.S. non-farm payrolls will speak directly to the potential for an October rate rise.” ASIA’S DAY: Tokyo’s Nikkei 225 index fell 1.3 percent to 17,645.11 and Singapore, Bangkok, Manila and Jakarta also retreated.

CHINA PROFITS: Profits at China’s major industrial companies declined by 8.8 percent in August, government data showed, in a new sign of weakness in the world’s second-largest economy. The Shanghai Composite gained 0.3 percent, paring its biggest quarterly loss since 2008, as a rally for technology companies overshadowed the industrial profit report. Economist Yating Xu at IHS Global Insight said consumer goods manufacturing is resilient but could suffer if economic growth falls further and drags on domestic consumption. The ringgit fell for a fifth day,leading losses in Asia, as new allegations against a Malaysian state investment company damped demand for the nation’s assets.

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