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 Turkish markets surged after the Islamist-rooted AK Party won a
clear majority in Sunday's parliamentary election.
Asian shares <.MIAPJ0000PUS> hit their lowest level in almost three
weeks after two surveys showed Chinese factory activity slowing.
The private Caixin purchasing manager's index showed activity
declined for an eighth consecutive month. An official PMI survey on
Sunday showed manufacturing unexpectedly contracted in October for a
third straight month.
The figures helped push down the dollar and crude oil and drove
copper to a one-month low.
Chinese shares also fell on concern about the weak economy. The CSI
300 index <.CSI300> of largest listed companies in Shanghai and
Shenzhen closed 1.6 percent lower and the Shanghai Composite index
<.SSEC> lost 1.7 percent.
"It's been a volatile start to markets in China this morning
following the latest data," said Deutsche Bank strategist John Reid. Worries over global growth, particularly in China, have rattled
financial markets in recent weeks, despite steps by the Chinese
authorities to stimulate the economy.
The prospect of higher U.S. interest rates, after the Federal
Reserve left the door open last week to a first increase since 2006
in December, has also clouded the outlook.
The pan-European FTSEurofirst stocks index <.FTEU3>, which gained
about 8 percent in October for its best month in more than six
years, fell 0.5 percent in early trade. However, losses were pared
after data showed factory activity in Germany and the euro zone as a
whole marginally beat forecasts.
The index was last down 0.2 percent, with Germany's DAX <.GDAXI> up
0.2 percent
Turkish stocks <.XU100>, which make up less than 5 percent of MSCI's
emerging market index, rose more than 5 percent after AK's election
win.
Turkey's lira currency <TRYTOM=D3> rose to its highest since late
July and was last up 3.7 percent at 2.807 per dollar.
"The markets have been yearning for a period of political stability
in Turkey for quite some time now. To all intents and purposes this
is the best result that the markets could expect," said Nicholas
Spiro, managing director of Spiro Sovereign Strategy.
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DRAGHI
The dollar was down 0.1 percent against a basket of its peers
<.DXY>. The euro <EUR=> was up 0.2 percent at $1.1021 after comments
at the weekend from European Central Bank President Mario Draghi
were seen as not particularly dovish.
Draghi said after the ECB's last policy meeting that the central
bank could introduce new stimulus measures as soon as December and
was considering cutting its deposit rate.
In an interview with the Italian newspaper Il Sole 24 Ore published
on Saturday, he said it was an open question whether further
stimulus was needed.
"The weekend comment from Draghi was a bit more balanced and neutral
than before, which is triggering some short-covering in the euro,"
said Yujiro Goto, a currency analyst at Nomura.
The yen <JPY=> gained 0.1 percent to 120.53 per dollar.
Euro zone bond yields rose. German 10-year yields <DE10YT=TWEB> rose
4.4 basis points to 0.57 percent. Italian <IT10YT=TWEB> and Spanish
<ES10YT=TWEB> equivalents rose 8.7 and 8.5 bps to 1.57 and 1.77
percent respectively.
Oil prices fell in Asia on the prospect of weak Chinese demand.
Brent crude <LCOc1>, the global benchmark, was last down 48 cents a
barrel at $49.08.
Copper <CMCU3> hit a one-month low of $5,086.50 a tonne before
recovering to $5,126, up 0.3 percent on the day.
Gold <XAU=> hit a four-week low of $1,134.60 an ounce on bets the
U.S. Federal Reserve would raise interest rates next month. It last
traded at $1,139.25.
(Additional reporting by Shinichi Saoshiro and Hideyuki Sano in
Tokyo, Jamie McGeever and Anirban Nag in London, David Dolan and
Daren Butler in Istanbul; editing by Larry King)
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