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Stocks fall amid China worries; Dollar holds gains: market wrap

The Stoxx Europe 600 Index declined 0.6% as of 8:10 a.m. London time, the largest drop in two weeks.
 

European stocks slid, following a retreat in Asia amid growing concerns about a slowdown in China and policy makers’ steps to address it. The dollar advanced as the Federal Reserve stayed on track for a December rate hike.

Mining and energy shares led a drop in Europe’s main equity gauge after crude oil entered a bear market. Futures contracts pointed to second day of declines for U.S. stocks. Equities in Hong Kong and China led losses in the Asia, with financial shares doing particularly poorly following news that Beijing plans to set quotas for banks to pump credit into private companies. Treasury yields edged lower after three days of gains.

Softer Chinese producer-price gains, weak car sales and a disappointing outlook from a top online travel company combined to reignite lingering concerns about the health of the world’s second-biggest economy. That’s capturing investor attention after a Fed rate meeting on Thursday that offered few surprises, with policymakers repeating their outlook for “further gradual” increases.

Meanwhile, the offshore yuan held this week’s drop, amid little sign of an end to the U.S China trade war in the wake of the midterm elections. The pound softened on ongoing speculation over a potential Brexit deal. Emerging market currencies slid.

Coming Up

The U.K economy probably picked up in the third quarter, economists forecast. GDP is seen rising 0.6% from the prior period and 1.5% on the year.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index declined 0.6% as of 8:10 a.m. London time, the largest drop in two weeks. Futures on the S&P 500 Index fell 0.4%, the biggest fall in a week. The MSCI Asia Pacific Index declined 1.1%. The MSCI Emerging Market Index sank 1.5% to the lowest in more than a week on the biggest tumble in more than two weeks.

Currencies

The Bloomberg Dollar Spot Index climbed 0.2% to the highest in more than a week. The euro dipped 0.2% to $1.134, the weakest in more than a week. The British pound fell 0.3% to $1.302, the weakest in a week. The Japanese yen gained 0.2% to 113.81 per dollar, the biggest rise in two weeks.

Bonds

The yield on 10-year Treasuries declined three basis points to 3.21%, the largest drop in two weeks. Germany’s 10-year yield fell three basis points to 0.43%, the biggest drop in two weeks.

Commodities

West Texas Intermediate crude dipped 0.6% to $60.32 a barrel, hitting the lowest in seven months with its 10th straight decline. Gold decreased 0.2% to $1,221.15 an ounce, reaching the weakest in more than a week on its sixth consecutive decline.

© 2018 Bloomberg L.P

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