* World shares slide as economic outlook darkens
* U.S. stocks seen opening flat
* Euro hovers around $1.29, awaiting Spanish move on bailout
* Brent crude slips a dollar to under $111 a barrel
By Richard Hubbard
LONDON, Oct 3 Signs the global economic slowdown
may be worsening sent world share markets and oil lower on
Wednesday, while the euro held steady against the dollar as
investors waited for Spain to take the steps to trigger European
Central Bank intervention.
The latest data from surveys of purchasing managers'
activity across the euro zone and China showed the growth
outlook has not improved, despite the best efforts of central
banks to stimulate their economies.
"There's little to be cheerful about," said Filip Petersson,
analyst at SEB in Stockholm. "There's worry about whether Spain
will ask for a bailout or not, and there's major uncertainty
The gloomier economic data, including weak export numbers
from resource-rich Australia, sent Asian markets lower
and saw the FTSEurofirst 300 index of
top European shares slip 0.1 percent to 1,100.83 points.
U.S. stocks were poised for a flat open on Wall Street, with
attention on the September ISM purchasing managers' report,
which should point to better growth.
MSCI's world equity index was down 0.16
percent at 332.97, though it remains in positive territory for
October, which would be its fifth straight monthly rise.
Crude oil prices and commodities like copper were hit as the
weaker data dimmed the outlook for demand.
Brent November crude futures fell $1 to $110.57 a
barrel, while U.S. November crude shed 60 cents to $91.30
Three-month copper on the London Metal Exchange had
eased 0.5 percent to $8,283.00 a tonne, after climbing more than
2 percent over the past four sessions.
A fresh update on the September euro zone purchasing
managers' survey indicated it was almost inevitable now that the
region will slip into its second recession in three years during
the September quarter.
The Markit Eurozone Composite PMI fell to 46.1 in September
from 46.3 in August. Any reading below 50 indicates economic
"We are heading towards a 0.2 percent contraction in the
third quarter and a mild 0.1 percent contraction in the fourth
quarter," said Evelyn Hermann, a European economist at BNP
Paribas in London.
Last month the European Central Bank sought to calm market
nerves and respond to the growing impact from the debt crisis on
business by promising to buy bonds issued by governments that
requested help if they agreed to tough economic reforms.
As yet no government has sought the ECB's assistance,
though the markets expect Spain, which faces huge refinancing
needs this month, to be the first. But uncertainty over when it
will ask for the help is keeping investors on edge.
Spanish Prime Minister Mariano Rajoy dashed hopes that an
announcement was in the works when he told regional government
leaders on Tuesday that it was not imminent.
Since the request, when it comes, will likely spark big
demand for the euro, investors opted to wait, leaving the single
currency virtually unchanged against the dollar at $1.2920
, above the three-week low of $1.2803 hit on Monday.
"There's a little bit of doubt with respect to Spain, but
it's more or less inevitable they will request financial
assistance at some stage," said Peter Kinsella, currency
strategist at Commerzbank.
The delay implied by Rajoy's latest comments lifted demand
for safe-haven German government bonds, sending 10-year yields
down two basis points to 1.44 percent.
Ten-year Spanish government bond yields were
little changed at 5.76 percent, while two-year borrowing costs
rose slightly to 3.24 percent.
"A lot of the improvement we had seen in Spanish bonds
yesterday was driven by overnight speculation that a bailout was
imminent, so any rebuttal of that had an impact," said Brian
Barry, fixed income analyst at Investec.
Activity in most markets was also being curtailed by caution
ahead of the European Central Bank's monthly monetary policy
meeting and a Spanish debt auction on Thursday, and by a U.S.
jobs report due out on Friday.
"All eyes at the moment are on non-farm payrolls on Friday.
If we get a reasonably good number, that will be 'risk-on'
across the board, and the euro will grind higher," Commerzbank's