Data from Beijing showed below-forecast factory output and
investment growth hitting a near 13-year low, reinforcing signs that
the world's second-biggest economy will see its weakest growth for
almost 24 years this year.
Stock markets, however, were not put off, wagering that the
lacklustre figures could encourage more support measures from the
Chinese authorities in the coming months, and that the slide in oil
could aid growth globally.
European shares rose 0.5 percent in a small rebound from falls on
Wednesday. Futures markets pointed to a positive start for Wall
Street later too after Asian and emerging market stocks had edged up
But it was oil that remained the focus as it sat slumped at $79.60 a
barrel, the first time since the end of September 2010 it had
dropped under $80.
The Organization of the Petroleum Exporting Countries (OPEC) said in
its latest report on Wednesday that demand for oil was expected to
drop by around a million barrels a day next year because of the U.S.
Its top producer, Saudi Arabia, also gave little away about whether
it will cut output to remove surplus oil from the market, ahead of
what is shaping up to be a landmark OPEC meeting on Nov. 27.
"There are not many bullish factors to lift the market now," said
Avtar Sandu, senior manager for commodities at Phillip Futures in
Singapore. "But it's not a one-way street down. Those who have been
selling want to take profits around this area."
The robust dollar added to the pressure on oil as it moved towards a
recent seven-year high against the yen, driven by speculation that
Japanese Prime Minister Shinzo Abe will call a snap election in
A senior figure in Abe's ruling party told reporters it appeared the
premier had indeed decided to call an election. If he wins,
economists believe it will clear the way for further stimulus
Oil's ongoing slide also put renewed pressure on Russia's hard-hit
It was down well over 1 percent at 46.27 to the dollar and with
tensions also bubbling in Ukraine again, traders were watching to
see whether the central bank would be forced into more decisive
action to defend the currency.
The central bank's deputy governor, Ksenia Yudayeva, told lawmakers
in Moscow that the fall in the rouble was a "bad recipe" for the
country's economy but also that the bank was against capital
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"Market participants are guessing about the central bank's next
policy step after heavy verbal interventions recently and the limit
imposed on FX swap operations," Maxim Korovin, a forex analyst at
VTB Capital, said in a note.
The world's other big oil producers were being bruised too.
Nigeria's naira fell hard for a fourth consecutive day despite
central bank efforts to stabilise it, while Saudi Arabia's stock
market, which is packed with oil firms, also tumbled.
In Europe's bond markets, both German and Italian yields dipped as a
downbeat survey from the European Central Bank underlined the need
for further policy easing, though the euro bucked the trend, rising
0.2 percent against the dollar.
Expert economists the ECB surveys every quarter cut their euro zone
inflation forecasts for next year to just 1.0 percent and 1.4
percent in 2016, down from 1.2 percent and 1.5 percent respectively
last time around.
"The balance of risks has become more clearly tilted to the
downside. ... Respondents identify geopolitical tensions, mainly in
Ukraine and Russia, but also in the Middle East, as by far the main
risk," the ECB's report on the findings read.
Worries about low inflation are widespread and bolstering
expectations of ongoing support and cheap money from the world's
major central banks.
Safe-haven gold was steady at $1,160.76 per ounce, above Friday's 4
1/2-year low of $1,131.85, while growth-attuned metal copper
was lifted 0.2 percent to $6,694 a tonne by the Chinese stimulus
(Additional reporting by Jacob Gronholt-Pedersen in Singapore and
Alexander Winning in Moscow; Editing by Hugh Lawson)
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