Europe: Stocks hit by weak Chinese data

[LONDON] Europe's main stock markets closed mixed on Monday as investors digested poor Chinese trade data that signalled fresh weakness in the world's second-biggest economy, dealers said.

London's benchmark FTSE 100 index dipped 0.36 per cent to close at 7,064.30 points, while Frankfurt's DAX 30 index was down 0.29 per cent to 12,338.73 points.

The CAC 40 in Paris however rose 0.26 per cent to 5,254.12 points.

In foreign exchange, the European single currency fell to US$1.0583 from US$1.0599 late in New York on Friday.

China's customs administration said exports fell by a surprising 15 per cent year-on-year in March, while imports tumbled 12.7 per cent, in the latest data showing the Asian powerhouse economy is struggling.

The news weighed on the mining and resources sector in Europe, because China is a major consumer of raw materials.

In London, BHP Billiton's share price tumbled 3.25 per cent to 1,416.00 pence.

Anglo American dived 2.28 per cent to 998.70 pence, Antofagasta dropped 2.50 per cent to 722.00 pence and Rio Tinto shed 0.81 per cent to 2,814.00 pence.

"Beijing's brutal trade figures have sparked a sell-off in the mineral-related stocks, and the overnight announcement from China has set the pace for the growth figures that are due out later this week," said IG analyst David Madden.

"The collapse in China's trade balance on the month was so dramatic it left some traders wondering whether the figures were accurate, and other dealers viewed the dreadful numbers as a sign for further stimulus."

Before the weekend, European equities hit record highs on Friday as a weaker single currency boosted companies' exports from the eurozone, dealers said.

Wall Street meanwhile was trading in positive territory as a heavy week of earnings and economic data got under way.

The Dow Jones Industrial Average was up 0.13 per cent in midday trade, while the broad-based S&P 500 gained 0.19 per cent. The tech-rich Nasdaq Composite Index advanced 0.51 per cent.

Across in Asia, markets mostly closed higher as China's data stoked hopes for fresh easing measures in the export giant.

Investors took the news as a cue to pump even more cash into equities, expecting China's leaders to unveil more easing measures on top of the two interest rate cuts since November and a reduction in the amount of cash banks must keep in reserve.

Hong Kong stocks leapt 2.73 per cent and Shanghai rallied 2.17 per cent.

Seoul gained 0.53 per cent, while Tokyo ended marginally lower and Sydney shed 0.14 per cent.

"Asian markets shrugged off another poor set of Chinese trade data today," said Rebecca O'Keeffe, head of investment at online stockbroker Interactive Investor.

"However, once again, weakness has been viewed as a reason to expect further stimulus from Chinese policy makers, prompting Chinese shares to rally."

AFP