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Markets fall as Chinese data disappoints and ahead of UK, EU and US manufacturing - live

Discussion in 'Market News' started by Lily, Jan 4, 2016.

  1. Lily

    Lily Forum Member

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    Share trading in China halted as survey renews fears of economic slowdown

    8.16am GMT

    With the FTSE 100 now down around 2%, market analyst Tony Cross of Trustnet Direct said:

    It might be a new year as far as the calendar is concerned, but the market seems unwilling to be taking a fresh view. Disappointing manufacturing data out of China overnight resulted in such a marked fall for domestic stocks that trading was suspended in Shanghai for the remainder of the session, so there can be no surprise that many of the mining stocks in London have once again been left wearing more than their fair share of losses in early trade in what is by all accounts a sea of red numbers. One notable exception here is Randgold Resources – the equity slump in China is driving gold prices sharply higher, leaving the stock as the only winner a few minutes into the day.

    A degree of volatility was probably to be expected this morning as normal trading conditions resume, but it appears that the big sell-off is being driven largely by the overnight news out of Asia, rather than any New Year’s hangover of the so-called Santa rally we saw start less than two weeks ago.

    8.15am GMT

    With further tensions in the Middle East, notably between Saudi Arabia and Iran after the execution of the Saudi Shia cleric Sheikh Nimr al-Nimr, crude prices have edged higher.

    Brent crude is currently up 0.7% at $37.57 a barrel, and would probably have been higher if not for the weak Chinese data.

    8.09am GMT

    In the wake of the Chinese data disappointment, European markets have opened sharply lower.

    The FTSE 100 has fallen 87 points or 1.4%, while Germany’s Dax has dropped 2.8% and France’s Cac is down 1.2% and Spain’s Ibex has lost 1.3%.

    8.04am GMT

    More on Chinese manufacturing:

    Chart/quote (Markit): China's manufacturing sector continues to contract; PMI weaker than expected - pic.twitter.com/E1975aER7x

    7.55am GMT

    Ahead of the UK PMI figures, here’s a preview from Howard Archer of IHS Global Insight:

    The manufacturing purchasing managers’ survey (out on Monday) is likely to show modest overall expansion in December, although it is unclear to what extent activity may have been affected by the flooding. Specifically, we expect the manufacturing purchasing managers’ index (PMI) to have edged back further to 52.5 in December after dipping to 52.7 in November from 55.2 in October (which had been the best performance since June 2014 and a sharp improvement from 51.7 in September).

    Even so, this would result in the PMI averaging 53.5 in the fourth quarter, which would be markedly above the third quarter average of 51.8 and clearly above the 50.0 level indicates flat activity.

    7.50am GMT

    The weak Chinese data and the subsequent plunge on the country’s stock markets is likely to have a negative impact on European shares:

    Our European opening calls: $FTSE 6174 down 68 $DAX 10499 down 245 $CAC 4571 down 67 $IBEX 9397 down 147 $MIB 21058 down 361

    7.49am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

    It’s a good day for data junkies, with snapshots of December’s manufacturing figures from the UK, US and Europe.

    China’s latest PMI data implies more stimulus may be required in 2016. The surprise monthly drop in the Caixin report comes off the back of the official manufacturing PMI that saw factory activity shrink for the fifth month in December with a reading of 49.7, up slightly from November. A big swing factor for this coming year will be whether Beijing makes better use of its ability to stabilise the Chinese economy. The government has been walking a tightrope of growth stabilisation and economic reform. The way Chinese authorities lean in 2016 could determine whether market’s have a good year or not.

    Continue reading...
     

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