Global Markets: Stocks fall on China slowdown concern; Brent ends below $97/bbl

Valecha Engineering

22/09/2014 22:08

* Chinese growth worries hit stocks, oil 
    * MSCI emerging market index has worst day since March 
    * U.S. dollar gains against Australian dollar 
 
 (Updates with U.S. market closes) 
    By Caroline Valetkevitch 
    NEW YORK, Sept 22 (Reuters) - Concern about a potential 
economic slowdown in China pressured world stock indexes on 
Monday and helped pushed Brent crude oil below $97 a barrel. 
    Emerging markets sank, with the MSCI Emerging Market index 
 .MSCIEF  falling 1.3 percent, its biggest daily percentage drop 
since March. The dollar rose against the Australian dollar. 
    Signs of disagreement between major economic powers on the 
need for extra stimulus further clouded the outlook. 
 ID:nL3N0RM004  
    China's finance minister, Lou Jiwei, on Sunday said the 
country wouldn't dramatically alter its economic policy because 
of any one economic indicator. His comments came days after many 
economists lowered growth forecasts for China following the 
release of data that showed factory output in August grew at its 
weakest pace in nearly six years. ID:nL3N0RM06E   
    Investors worried a closely watched gauge of Chinese 
manufacturing, due on Tuesday, could indicate activity was 
contracting.  ID:nL3N0RN270  
    "The China demand story is a new variation of a story we've 
been worried about for a few months," said Art Hogan, chief 
market strategist at Wunderlich Securities in New York. 
    Mining companies declined following the concerns about 
China. U.S.-listed shares of global miner BHP Billiton  BHP.N  
dropped 3.2 percent to $61.28, while shares of the Brazilian 
miner Vale  VALE.N  fell 4.7 percent to $11.44 in New York. 
    The Dow Jones industrial average  .DJI  fell 107.06 points, 
or 0.62 percent, to 17,172.68, the S&P 500  .SPX  lost 16.11 
points, or 0.8 percent, to 1,994.29 and the Nasdaq Composite 
 .IXIC  dropped 52.10 points, or 1.14 percent, to 4,527.69. 
    MSCI's global share index  .MIWD00000PUS  was down 0.8 
percent, while European shares  .FTEU3  ended down 0.6 percent. 
    The dollar rose against the Australian dollar and emerging 
market currencies hurt by weaker commodity prices. 
    The Australian dollar touched a seven-month low of $0.8854 
 AUD=  against the U.S. dollar. The dollar  .DXY  was flat 
against most major currencies, though. 
    Concerns over global growth and suggestions at a meeting of 
Group of 20 officials that China might hold off from further 
economic stimulus weighed. China and Australia are major trading 
partners, and the Australian currency often is used as a liquid 
proxy for China plays. 
    The closely watched Chinese manufacturing number will be 
released on Tuesday, as will other global flash business 
activity surveys for September. 
    The G20 officials also said they were close to adding $2 
trillion to the global economy, but there were signs of 
disagreement. 
    Brent crude for November delivery  LCOc1  fell $1.42 to 
settle at $96.97 a barrel. The expiring U.S. October crude 
contract  CLV4  fell 89 cents to settle and go off the board at 
$91.52 a barrel, down for a fourth consecutive session. 
    "China growth is slowing, which is a driver for crude," said 
Oliver Sloup, director of managed futures at iitrader.com in 
Chicago. 
    In the U.S. Treasuries market, long-dated yields dipped to 
their lowest in over a week on the view that lingering weakness 
in U.S. economic data may force the Federal Reserve to maintain 
a dovish stance on raising interest rates. 
    Ten-year U.S. Treasury notes  US10YT=RR  were up 6/32 in 
price to yield 2.56 percent, from a yield of 2.59 percent late 
Friday. U.S. 30-year Treasury bonds  US30YT=RR  added 8/32 to 
yield 3.29 percent, from a yield of 3.3 percent late Friday. The 
yield hit a session low of 3.26 percent, its lowest since Sept. 
11. 
 
 (Additional reporting by Robert Gibbons,; Michael Connor and 
Chuck Mikolajczak in New York; Editing by Meredith Mazzilli, 
James Dalgleish and Chizu Nomiyama) 
 ((caroline.valetkevitch@thomsonreuters.com; +1 646 223 6393; 
Reuters Messaging: 
caroline.valetkevitch.thomsonreuters.com@reuters.net)) 
 
Keywords: MARKETS GLOBAL/