London (BBN)-European stocks dropped and a gauge of emerging-market shares headed for a three-month low as government bonds rose.
The Australian dollar strengthened as a China factory gauge unexpectedly advanced, reports Bloomberg.
The Stoxx Europe 600 Index dropped 0.4 percent by 8:22am in London, with the MSCI Emerging Markets Index sliding 0.3 percent toward its lowest close since June 5. Standard & Poor’s 500 Index futures fell 0.1 percent.
Copper climbed 0.4 percent after a gauge of commodities closed at the lowest since July 2009 yesterday. Australian bonds rallied while the local dollar strengthened 0.3 percent from a seven-month low. The yen advanced 0.2 percent.
The so-called flash purchasing managers index rose to 50.5 from a reading of 50.2 in August, HSBC Holdings Plc and Markit Economics said.
A similar gauge in France showed a slower-than-estimated contraction. About $574 billion was wiped from the value of global equities yesterday after China’s Finance Minister Lou Jiwei damped speculation leaders in Asia’s biggest economy will implement large-scale stimulus. Factory indexes for the U.S. and euro area are also scheduled.
“There’s cyclical weakness in stocks, stemming from lower commodity prices to the propensity for a mild recession in Europe,” said Raymond Tang, who oversees about $15 billion in Kuala Lumpur as chief investment officer at CIMB-Principal Asset Management Bhd.
“There are always concerns about China’s economy and credit risks, whether it’s just worries or something that will break the camel’s back. So far, they’ve been well managed.”
BBN/SS-23Sept14-3:15pm (BST)