World stocks slip on Fed rate hike prospects, China trade
BEIJING - Global stocks were weighed down Monday by weak Chinese and global economic data, as well as the prospect of a U.S. interest rate hike next month. Japan and China, however, bucked the trend to rise.
In Europe, Germany's DAX shed 0.4 percent to 10,939.64 and France's CAC-40 lost 0.6 percent to 4,954.78. Britain's FTSE 100 fell 0.1 percent to 6,350.17.
Futures pointed to a weak open on Wall Street: Dow futures were down 0.3 percent and S&P 500 futures were flat.
Customs data showed China's imports fell by 18.8 percent in October from a year earlier, damping hopes for a rebound this quarter from its economic slowdown. Exports shrank 6.9 percent in a sign of weak global demand. So far this year, total Chinese trade has declined 8.5 percent compared with the first 10 months of last year. Weak demand from China is a negative for countries such as Australia and South Korea but also suggests Beijing will provide stimulus to the economy to prevent it from slowing too sharply.
A global policy watchdog, the OECD, warned Monday that the drop in global trade is a risk to the world economy. Stagnating or declining rates of trade "have, in the past, been associated with global recession," it said in a broad report on the world economy.
Markets have been subdued since Friday, when an unexpectedly strong October jobs report cemented expectations the U.S. Federal Reserve will raise interest rates as early as next month after keeping them close to zero since the 2008 global crisis. The Labor Department said U.S. employers added 271,000 jobs, beating the most optimistic projections, while the unemployment rate dipped to a fresh seven-year low of 5 percent, from 5.1 percent. The market turmoil over the summer kept the Fed from raising rates at their September meeting.
The Shanghai Composite Index rose 1.6 percent to 3,646.88 after the weak data raised stimulus hopes. Tokyo's Nikkei 225 was up 2 percent at 19,642.74 as prospects of a rate hike propelled the dollar higher against the yen. Hong Kong's Hang Seng fell 0.6 percent to 22,726.77. Australia's ASX/S&P 200 shed 1.8 percent to 5,119.50 and South Korea's Kospi retreated 0.8 percent to 2,025.70. Stock benchmarks in Southeast Asia fell.
Benchmark U.S. crude gained 37 cents to $44.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.09 on Friday to close at $44.29. Brent crude, a benchmark for international oils, added 22 cents to $47.63 in London. It fell 56 cents on Friday to close at $47.42.
The dollar rose to 123.47 yen from Friday's 123.17. The euro gained to $1.0781 from $1.0742.