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 Stocks opened the week on a negative note. MSCI's broadest index of
Asia-Pacific shares outside Japan lost 0.5 percent.
Chinese trade data eased fears of slowdown in the world's
second-largest economy, showing exports grew 15.4 percent
year-on-year in September and exports rose 6 percent in value, both
ahead of market expectations. But broader concerns about global
growth remained.
European shares opened lower but investors found solace in the
expected impact of cheaper oil on airlines. Germany's Lufthansa
rose 3.3 percent and Air France-KLM were up 3.8 percent. This
helped lift the pan-European FTSEurofirst 300 index 0.3
percent, though some saw bargains after a fall of about 8 percent
since mid-September.
"The sell-off in global stocks and crude prices has clearly been
flow-driven, and such a move brings good buying opportunities for
long-term investors like us," said Evan Bauman, a portfolio manager
at ClearBridge Investments, which has $36 billion in assets under
management.
"We've been holding cash in the past few months, about 13-14 percent
of the portfolio, expecting a pull-back. With the market's recent
retreat, we've been putting a bit of this money back to work."
Wall Street looked set to open higher, with S&P e-mini stock index
futures <ESc1> up 0.4 percent. U.S. bond markets are closed for the
Columbus Day holiday.
The MSCI All-Country World index was up 0.2 percent. It had
earlier dropped to a seven-month low and turned negative for the
year.
Investors have been cutting their exposure to riskier assets on
worries about the effect of an end to U.S. Federal Reserve's
bond-buying stimulus later this month, mounting risks of recession
in the euro zone and a floundering Japanese economy.
The IMF's member countries called on Saturday for bold action to
bolster the economic recovery.
The Fund last week cut its global growth forecast for the third time
this year.
The euro zone, without growth and flirting with deflation, faces the
prospect of recession in its economic powerhouse, Germany. Adding to
the low mood, ratings agency Standard & Poor's revised on Friday
France's credit outlook to negative and cut Finland's triple-A
rating to AA+.
The dollar index, which measures the greenback against a basket of
currencies was down 0.5 percent. The Japanese yen, often sought as a
safe haven in uncertain times, gained 0.3 percent to 107.37 to the
dollar and the euro rose by a similar amount to $1.2688.
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"We look for further yen upside against the dollar in coming weeks,
as U.S. (interest) rates are likely to adjust near-term lower," said
Petr Krpata, currency strategist at ING.
ABUNDANT SUPPLY
A combination of abundant supply and concerns about global demand
has crushed crude oil prices in recent weeks. Brent crude futures
for November last traded at $88.14 yen, having touched $87.74 in
Asian trade, its lowest since December 2010, although the Chinese
trade data helped pare losses.
Kuwait said OPEC was unlikely to cut production to support prices,
while Saudi Arabia has privately told oil market participants it
could be comfortable with $80 for oil.
"Judging by the latest comments from Kuwait and Saudi Arabia, we
expect more near-term downside ahead for oil prices amidst the
ongoing global growth scare," said Gordon Kwan, head of oil and gas
research at Nomura.
Spot gold rose to a near four-week high of $1,237.30 an ounce and
last stood at $1,227.90, up 0.4 percent.
(Additional reporting by Ian Chua in Sydney, Anirban Nag and Dlara
Denina in London and Blaise Robinson in Paris; Editing by Catherine
Evans, Larry King)
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