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 Commodity prices edged up but held near multi-year lows on concern
over an economic slowdown in major consumer China.
Mining and trading giant Glencore, whose shares fell by almost a
third on Monday on investor concern over its debt levels, eked out
gains of 4 percent in London but only after its Hong Kong-listed
shares fell 29 percent.
Asian commodity merchant Noble lost 11 percent, having at one point
in the session fallen by 15 percent to levels last seen in October
2008.
European shares partially recouped early losses but most major
indexes remained near 2015 lows. Wall Street was set to open higher,
according to index futures.
Earlier, Asian shares slid to 3 1/2-year lows on concerns a slowdown
in China will dent its previously massive demand for commodities.
Emerging equities dropped 0.8 percent while sovereign dollar bond
yield spreads hit 6 1/2-year highs on doubts about the
creditworthiness of commodity exporting countries and companies.
Copper steadied after hitting a one-month low. It last traded at
$4,979, up 0.3 percent on the day but within reach of a 6 1/2-year
low below $4,855.
Platinum fell below $900 an ounce for the first time since 2009 on
fears that the emissions scandal embroiling German carmaker
Volkswagen could hit demand from the auto sector. It last stood at
$910.75.
Gold fell 0.4 percent to $1,126.60 an ounce on worries U.S. interest
rates could rise later this year.
The pan-European FTSEurofirst 300 index was down 0.3 percent, having
dropped 1.7 percent earlier. Losses were led by biotech firms, which
helped push the U.S. Nasdaq index down 3 percent on Monday.
VW shares fell 1.1 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan slid 1.8
percent, having earlier touched its lowest levels since June 2012.
MSCI's all-country index of world shares lost 0.5 percent, touching
its lowest since September 2013.
Tokyo's Nikkei index fell 4 percent to an eight-month low and turned
negative for the year, with shares of commodity-linked firms and
shippers pummeled.
Commodity and energy shares led Chinese stocks lower. The CSI 300
index of the largest listed firms in Shanghai and Shenzhen fell 2
percent and the Shanghai Composite lost 2.1 percent. Hong Kong's
Hang Seng fell 3 percent.
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The commodity-linked Australian dollar traded near 6 1/2-year lows
before recovering while the Canadian dollar hit an 11-year low.
The euro was down 0.2 percent at $1.1276 as Spanish consumer prices
fell at their fastest rate in seven months in September and German
data pointed to inflation around zero.
"If euro zone inflation prints below market consensus tomorrow,
expectations of more asset purchases from the ECB will be boosted,"
said Petr Krpata, FX strategist at ING. "The uncertainty about more
QE by the ECB is not good for the euro."
DOLLAR
The U.S. dollar was marginally higher against a basket of major
currencies.
Some analysts said the latest market turmoil could lead the U.S.
Federal Reserve to delay raising interest rates and that this was
weighing on the dollar.
"The market thinks the latest bout of risk aversion will drive the
Fed to postpone a rate hike," said Niels Christensen, FX strategist
at Nordea. "That is weighing on the dollar, while the yen, the franc
and the euro are all trading higher."
Since the Fed kept rates on hold on Sept. 17, markets have been
puzzling over whether it will hike before the end of 2015.
There were mixed messages from Fed officials on Monday and investors
will be looking to a speech from the U.S. central bank's Chair Janet
Yellen on Wednesday for more clarity.
Brent crude oil, which lost 2.5 percent on Monday, rose 47 cents a
barrel to $47.81 on signs of a tightening U.S. market, although
analysts said the outlook remained weak.
($1 = 119.9500 yen)
(Additional reporting by Lisa Twaronite in Tokyo, Anirban Nag and
Sujata Rao in London; Editing by Catherine Evans)
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