China's exports unexpectedly tumbled in February, falling 18.1
percent from a year earlier and swinging the trade balance into
deficit. The data underscored recent concerns about the outlook for
China's economy, even though the Lunar New Year holidays were blamed
for the slide.
The data put a dampener on risk sentiment, which had been boosted
briefly by Friday's stronger-than-expected U.S. non-farm payrolls
China's CSI300 share index <.CSI300> plunged 3.3 percent to its
lowest level in nearly nine months. Chinese gloom added to the
strain in emerging markets, compounding worries that the U.S.
Federal Reserve's reduction in stimulus will greatly curb the flow
"The weak China trade balance data caused some flight to quality on
less optimism about the global economy," said Jeffrey Young,
interest rate strategist at Nomura in New York.
Prices on benchmark 10-year U.S. Treasuries were last up 3/32 to
yield 2.78 percent.
The commodity-sensitive Australian and Canadian dollars declined,
both losing as much as half a percent against the greenback in the
wake of the plunge in exports from China.
On Wall Street, the Dow Jones industrial average <.DJI> fell 70.26
points or 0.43 percent, to 16,382.46, the S&P 500 <.SPX> lost 5.11
points or 0.27 percent, to 1,872.93 and the Nasdaq Composite <.IXIC>
dropped 11.229 points or 0.26 percent, to 4,324.994.
Shares of Freeport McMoRan Copper & Gold <FCX.N> lost 3.3 percent to
$31.14 as the signs of a slowing Chinese economy sent London copper
to an eight-month low. The S&P materials index <.SPLRCM> lost 0.6
European shares, as measured by the pan-European FTSEurofirst 300
index <.FTEU3>, closed down 0.5 percent, hit by declines in shares
of mining companies sensitive to China's ferocious appetite for raw
materials. A global stock index <.MIWD00000PUS> was down 0.6 percent
and an emerging market stock index <.MSCIEF> was down 1.3 percent.
German steel maker ThyssenKrupp <TKAG.DE>, down 3 percent, was among
the top losers in Europe as Chinese steel and iron ore futures
slumped to their lowest levels ever on concerns about a slowdown in
China, the world's top commodity buyer.
"Any poor news from China is always going to hit short-term market
sentiment, especially in the mining sector, and fears of slower
growth will hit base metals," said IPR Capital director Steven Mayne.
Despite weakness in Asian markets, a sense of relief in Europe that
tensions between Russia and the West over Crimea had not escalated
buoyed shares in early trading, though there was no escape from the
undercurrent of unease.
On Wall Street, Boeing Co <BA.N> shares lost 2.5 percent to $125.31
and were the biggest drag on the Dow and S&P 500, after the plane
maker said on Friday that "hairline cracks" had been discovered in
the wings of about 40 787 Dreamliners that are in production,
another setback for the company's newest jet.
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Separately, the disappearance of a Malaysian jetliner, a Boeing
777-200ER, is an "unprecedented aviation mystery," a senior official
said on Monday.
Shares of Freescale Semiconductor <FSL.N> were down 2 percent at
$22.92. Twenty Freescale employees were on the missing Malaysian
plane, mostly engineers and other experts working to make the
company's chip facilities in Tianjin, China, and Kuala Lumpur more
efficient, said Mitch Haws, vice president, global communications
and investor relations.
CHINESE DATA WEIGHS ON AUSTRALIAN, CANADIAN DOLLARS
The Aussie traded 0.4 percent lower at $0.9031, while the loonie was
down 0.2 percent at $1.1104.
"The Chinese export numbers are the main driver this morning — you
can see that the Aussie and Canadian dollars are both under
pressure," said Alvin Tann, strategist with French bank Societe
Generale in London.
The yuan earlier fell as much as 0.5 percent and Chinese short-term
rates dropped after another low daily yuan rate from China's central
bank added to speculation Beijing is quietly easing monetary policy
to buttress wobbly growth.
The U.S. dollar held steady against major currencies, supported by
hopes that U.S. job growth would pick up in the wake of last week's
mildly encouraging report on hiring. The dollar index <.DXY> was
little changed at 79.743.
In the metals markets, London copper hit an eight-month low.
Three-month copper on the London Metal Exchange traded down 1.36
percent to $6,690 a metric ton (7374.5 ton). It earlier slid as low
as $6,608 a ton, its weakest level since June 25 and within a
whisker off nearly three-year lows.
Adding to the pressure were China's imports of unwrought copper,
which fell 30 percent in February from January due to weak Shanghai
copper prices. Imports were still up 27 percent from last year's
The Chinese data also weighed on oil. Brent crude was trading 97
cents down at $108.03. U.S. oil fell $1.33 to $101.25 a barrel.
(Additional reporting by Marc Jones in
London and Sam Forgione and Richard Leong in New York; editing by
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