European stocks react to China trade deficit

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LONDON: Europe’s main stock markets traded mixed on Monday (Tuesday in Manila) as investors responded to economic data from China and the United States.

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On the corporate front, US-based Chiquita Brands and Ireland’s Fyffes Plc said they were merging in a deal that would create the world’s biggest banana supplier with annual revenue of $4.6 billion (6.4 billion euros).

London’s FTSE 100 slid 0.35 percent to 6,689.45 points, while the DAX 30 in Frankfurt fell 0.91 percent to 9,265.50 points.

However, in Paris the CAC 40 climbed 0.10 percent compared with Friday’s closing values to 4,370.84.

Madrid added 0.30 percent and Milan rose 0.58 percent.

“UK and European shares continue to falter at their multi-year highs following weak Chinese export data released over the weekend,” said CMC Markets UK analyst Jasper Lawler.

“The DAX led the charge lower, with Germany also being the most exposed to the explosive situation in Ukraine, due to their high dependence on Ukrainian natural gas,” he added.

A threat by Russian gas giant Gazprom on Friday to cut off gas supplies to Ukraine, which is the major transit country for the rest of Europe, put the chill on stocks.

Germany, the eurozone’s top economy, depends on Russia for about a third of its gas supplies, while other countries in central Europe are nearly completely dependent on Russian supplies which flow through Ukraine.

Chinese trade figures disappoint
Asian markets tumbled on Monday following a surprisingly poor batch of economic data out of China, while revised Japanese figures showed 2013 growth was slower than expected.

Beijing said on Saturday it had recorded an unexpected trade deficit of $22.98 billion in February.

The figure compared with a surplus of $14.8 billion in the same month last year, and a median forecast of an $11.9-billion surplus. Exports fell 18.1 percent and imports jumped 10.1 percent.

“A poor Chinese trade balance reading has put the miners on the back foot once again, with the sector giving back most of February’s surge, as traders take advantage of weaker consumption expectations in the east Asian behemoth,” said Chris Beauchamp, market analyst at traders IG.

In foreign exchange, the euro edged up to $1.3877 from $1.3874 late in New York City on Friday.

The dollar dipped to 103.22 yen from 103.24 yen on Friday.

On the London Bullion Market, the price of gold rose to $1,344 an ounce from $1,335.25 on Friday.

US stocks pushed lower on Monday, with the Dow Jones Industrial Average falling 0.42 percent to 16, points in midday trade.

The broad-based S&P 500 shed 0.29 percent to 1,872.64, while the tech-rich Nasdaq Composite Index gave up 0.26 percent to 4,324.92.

Wall Street had last week posted gains last week following a somewhat better set of economic data that helped offset tensions over Ukraine.

The gains were not the year’s most robust for a single week, but markets still finished in the black despite the occasional hick-up over Ukraine, where Russian forces have effectively taken control of Crimea, alarming the West.

Highlights in economic news included Friday’s eagerly awaited US jobs report, which showed the economy added 175,000 jobs in February, a big improvement after the December and January reports disappointed.

AFP

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