Hong Kong shares set to open weaker as growth worries weigh
Hong Kong shares were set to start weaker on Tuesday as worries about global growth following a fall in German business sentiment kept equities in check.
The Hang Seng index <.HSI>, which has risen for each of the past three weeks, closed down 0.2 percent on Monday as investors locked in gains ahead of the quarter-end.
Seoul shares seen weakening on German data, Spain eyed
Seoul shares <.KS11> are seen faltering early on Tuesday from a German confidence survey that dragged down global stock markets overnight, adding to concerns over the euro zone debt crisis despite recent measures taken by central banks to shore up growth.
German business sentiment fell for a fifth straight month in September to its lowest level since early 2010, reflecting that even the euro zone's strongest economy is sensitive to the region's economic woes.
Investors now await cues from the Spanish government which is set to present its draft budget for 2013 on Thursday.
"A possible bailout request from Spain will pump liquidity from the European central bank, ease the burden of the euro zone crisis and eventually lead to some stability in the global financial markets," said Ma Ju-ok, an analyst at Kiwoom Securities in Seoul.
Ma said in a research note that the South Korean stock market was expected to settle near the key psychological level of 2,000 points this week as retail investors and institutions finished their profit-taking from last week's rally.
Nikkei seen weaker after German data, Caterpillar forecast
Japan's Nikkei share average was seen dropping on Tuesday as investors trim risk exposure on renewed concerns about the global economy caused by weak German business sentiment data and a cut in forecast earnings from Caterpillar Inc <CAT.N>.
Market players said the Nikkei was likely to trade between 8,950 to 9,050 after Nikkei futures in Chicago <0#NIY:> closed at 8,985, down 0.1 percent from the close in Osaka <JNIc1>.
"The German data is just the latest sign of a global slowdown and is likely to drag on the market today," said Toshiyuki Kanayama, senior market analyst at Monex.
German business sentiment dropped in September to its lowest since early 2010, suggesting the euro zone's largest and strongest economy is succumbing to a downturn despite the European Central Bank's recent efforts to safeguard the single currency.
A firmer yen, around 77.85 yen to the dollar, is also likely to weigh on exporters as it threatens to erode their overseas revenues once repatriated and makes them less competitive.
Japanese suppliers for Apple Inc could also be sold off after supply constraints kept sales of the iPhone 5 below some market forecasts and investors worried the Apple would not be able to keep up with demand.
Gold falls on weak commodities, option expiry eyed
Gold fell on Monday, retreating from the previous session's nearly seven-month high as broadly lower crude oil and grain prices prompted investors to take profits.
Palladium dropped 4 percent for its biggest one-day decline since March on signs of platinum output returning to normal in top producer South Africa, triggering heavy speculative selling.
Traders said volatility could increase ahead of Tuesday's U.S. COMEX gold option expiration, while open interest in U.S. gold futures rose to a one-year high for a third straight session.
Bullion's rally is showing signs of fatigue after five straight weeks of higher prices. Repeated failures to break above key technical resistance above $1,790 an ounce to set a new 2012 high also prompted some investors to lessen their bullish bets.
Spot gold <XAU=> was down 0.6 percent at $1,762.20 an ounce by 2:11 p.m. EDT (1811 GMT). On Friday, gold hit a high of $1,787.20, just short of this year's peak of $1,790.30 reached on Feb. 29.
U.S. COMEX gold futures <GCZ2> for December delivery settled down $13.40 an ounce at $1,764.60. Trading volume totaled around 150,000 lots, in line with its 30-day average, preliminary Reuters data showed.
Silver <XAG=> fell 1.5 percent to $33.91 an ounce.
Euro declines to more than one-week low vs dollar, yen
The euro fell to its lowest in more than a week against the dollar and yen on Monday as a weak German business sentiment report and uncertainty about debt-plagued Spain added to concerns about the euro zone's slumping economy.
The drop in German business sentiment in September to its lowest since early 2010 raised worries that Germany, the largest euro zone economy, is succumbing to a downturn despite the European Central Bank's recently announced bond-buying plan.
Spain is also adding to the euro zone's pain. Spanish government bond yields rose on signs Madrid is making slow progress toward asking for the international bailout that markets are anticipating. Italian yields also rose.
Many market participants also believe the euro is poised for a pullback after a sharp rally in recent weeks that took the common currency to a four-month high against the dollar at $1.3169 on Sept. 17.
Hong Kong shares were set to start weaker on Tuesday as worries about global growth following a fall in German business sentiment kept equities in check.
The Hang Seng index <.HSI>, which has risen for each of the past three weeks, closed down 0.2 percent on Monday as investors locked in gains ahead of the quarter-end.
Seoul shares seen weakening on German data, Spain eyed
Seoul shares <.KS11> are seen faltering early on Tuesday from a German confidence survey that dragged down global stock markets overnight, adding to concerns over the euro zone debt crisis despite recent measures taken by central banks to shore up growth.
German business sentiment fell for a fifth straight month in September to its lowest level since early 2010, reflecting that even the euro zone's strongest economy is sensitive to the region's economic woes.
Investors now await cues from the Spanish government which is set to present its draft budget for 2013 on Thursday.
"A possible bailout request from Spain will pump liquidity from the European central bank, ease the burden of the euro zone crisis and eventually lead to some stability in the global financial markets," said Ma Ju-ok, an analyst at Kiwoom Securities in Seoul.
Ma said in a research note that the South Korean stock market was expected to settle near the key psychological level of 2,000 points this week as retail investors and institutions finished their profit-taking from last week's rally.
Nikkei seen weaker after German data, Caterpillar forecast
Japan's Nikkei share average was seen dropping on Tuesday as investors trim risk exposure on renewed concerns about the global economy caused by weak German business sentiment data and a cut in forecast earnings from Caterpillar Inc <CAT.N>.
Market players said the Nikkei was likely to trade between 8,950 to 9,050 after Nikkei futures in Chicago <0#NIY:> closed at 8,985, down 0.1 percent from the close in Osaka <JNIc1>.
"The German data is just the latest sign of a global slowdown and is likely to drag on the market today," said Toshiyuki Kanayama, senior market analyst at Monex.
German business sentiment dropped in September to its lowest since early 2010, suggesting the euro zone's largest and strongest economy is succumbing to a downturn despite the European Central Bank's recent efforts to safeguard the single currency.
A firmer yen, around 77.85 yen to the dollar, is also likely to weigh on exporters as it threatens to erode their overseas revenues once repatriated and makes them less competitive.
Japanese suppliers for Apple Inc could also be sold off after supply constraints kept sales of the iPhone 5 below some market forecasts and investors worried the Apple would not be able to keep up with demand.
Gold falls on weak commodities, option expiry eyed
Gold fell on Monday, retreating from the previous session's nearly seven-month high as broadly lower crude oil and grain prices prompted investors to take profits.
Palladium dropped 4 percent for its biggest one-day decline since March on signs of platinum output returning to normal in top producer South Africa, triggering heavy speculative selling.
Traders said volatility could increase ahead of Tuesday's U.S. COMEX gold option expiration, while open interest in U.S. gold futures rose to a one-year high for a third straight session.
Bullion's rally is showing signs of fatigue after five straight weeks of higher prices. Repeated failures to break above key technical resistance above $1,790 an ounce to set a new 2012 high also prompted some investors to lessen their bullish bets.
Spot gold <XAU=> was down 0.6 percent at $1,762.20 an ounce by 2:11 p.m. EDT (1811 GMT). On Friday, gold hit a high of $1,787.20, just short of this year's peak of $1,790.30 reached on Feb. 29.
U.S. COMEX gold futures <GCZ2> for December delivery settled down $13.40 an ounce at $1,764.60. Trading volume totaled around 150,000 lots, in line with its 30-day average, preliminary Reuters data showed.
Silver <XAG=> fell 1.5 percent to $33.91 an ounce.
Euro declines to more than one-week low vs dollar, yen
The euro fell to its lowest in more than a week against the dollar and yen on Monday as a weak German business sentiment report and uncertainty about debt-plagued Spain added to concerns about the euro zone's slumping economy.
The drop in German business sentiment in September to its lowest since early 2010 raised worries that Germany, the largest euro zone economy, is succumbing to a downturn despite the European Central Bank's recently announced bond-buying plan.
Spain is also adding to the euro zone's pain. Spanish government bond yields rose on signs Madrid is making slow progress toward asking for the international bailout that markets are anticipating. Italian yields also rose.
Many market participants also believe the euro is poised for a pullback after a sharp rally in recent weeks that took the common currency to a four-month high against the dollar at $1.3169 on Sept. 17.
The euro hit a session low of $1.2889, its lowest since Sept. 13. It last traded at $1.2928 <EUR=>, down 0.4 percent. Initial support is seen at $1.2905, the 23.6 percent retracement of the July to September rally, followed by its 200-day moving average, which comes in around $1.2828.
Against the yen, the euro last traded at 100.63 yen <EURJPY=>, down 0.8 percent. It dropped to 100.33, a more than one-week low.
Wall St drops after Caterpillar forecast, German data
U.S. stocks edged lower on Monday as a disappointing forecast from Caterpillar <CAT.N> and weak German data increased concerns that global growth may remain sluggish. Minutes before the close, Caterpillar cut its earnings forecast for 2015, citing weakness in the world economy. Its stock fell 0.9 percent to $90.87 and was the top drag on the Dow. After the bell, Caterpillar's stock lost another 2.1 percent to $88.99.
An index of German business sentiment declined for a fifth consecutive month in September, showing Europe's strongest economy was moving closer toward recession as the euro zone's debt crisis remains unresolved.
Concerns about a stalling global economy also were reflected in energy and technology shares, with the S&P energy index <.GSPE> down 0.5 percent and the S&P 500 technology index <.GSPT> down 0.8 percent.
But the S&P 500 is on track for a 7.6 percent gain for the quarter. Analysts said investors are probably now participating in "window dressing," where fund managers add some of the latest outperformers to their portfolio.
The gains have largely been tied to central bank stimulus plans. On Sept. 6, the European Central Bank announced its bond-buying plan; a week later, the Federal Reserve unveiled a third round of quantitative easing intended to bolster the economy and reduce U.S. unemployment.
The Dow Jones industrial average <.DJI> declined 20.55 points, or 0.15 percent, to close at 13,558.92. The Standard & Poor's 500 Index <.SPX> shed 3.26 points, or 0.22 percent, to 1,456.89. The Nasdaq Composite Index <.IXIC> dropped 19.18 points, or 0.60 percent, to end at 3,160.78.
Crude Declines for Fifth Time in Six Days
Oil dropped for the fifth time in six days as discord over the handling of Europe debt crisis and a decline in German business sentiment renewed concern that the European crisis will reduce oil demand. Prices fell 1 percent after German Chancellor Angela Merkel and French President Francois Hollande disagreed at a meeting Sept. 22 on a timetable to introduce joint oversight of Europe’s banks. German business confidence unexpectedly fell to the lowest level in more than two years, helping push the euro down against the dollar.
Oil for November delivery declined 96 cents to settle at $91.93 a barrel on the New York Mercantile Exchange, down 7.1 percent since Sept. 14 and 7 percent for the year. Brent oil for November settlement decreased $1.61, or 1.4 percent, to end at $109.81 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate narrowed for the first time in three days, falling to $17.88.
In speeches marking Franco-German reconciliation after World War II, Merkel rejected Hollande appeal to activate oversight of the banking union as soon as possible. Deadlock over regulation may delay a key building block in resolving the single currency debt crisis.
