* Weak China data offsets Friday's upbeat U.S. jobs report
* Ukraine unnerves markets, seen continuing as major factor
* Copper and oil hit by China, U.S. jobs data knocks gold
By Marc Jones
LONDON, March 10 World stocks edged off a
six-year peak and commodities from copper to crude oil tumbled
on Monday as surprisingly weak Chinese trade data rattled
investors already on edge over the crisis in Ukraine.
Despite weakness in Asian markets, a sense of relief in
Europe that tensions between Russia and the West over Crimea had
not escalated buoyed shares in early trading, though there was
no escape from the undercurrent of unease.
European shares faded through the morning and were
back in the red as U.S. trading loomed, and the continued
weakness in the DAX and big German firms that sell to
Russia offset gains by Portuguese, Italian and Spanish stocks.
Merger activity in France helped the CAC 40, but
mining firms sensitive to China's ferocious appetite for raw
materials weighed on London's FTSE 100 as commodities
and related currencies lost altitude.
"People sold on Friday on fear of an escalation in Crimea,
but things seem to have stabilised now so it's tempting to buy
the dip," said David Thebault, head of quantitative sales
trading at Global Equities in Paris.
China's exports unexpectedly tumbled 18 percent year-on-year
in February, swinging the trade balance into deficit and adding
to fears of a slowdown in the world's No. 2 economy.
It put an immediate dampener on risk sentiment, which had
been boosted briefly by Friday's stronger-than-expected U.S.
non-farm payrolls report.
China's CSI300 share index plunged 3.3 percent to
its lowest in nearly nine months, copper - of which China is the
biggest consumer - hit an eight-month low, while the
commodity-sensitive Australian and Canadian dollars
For emerging markets Chinese gloom added more strain,
compounding worries over the U.S. turning off the taps on the
cheap money that has been flowing to them.
Emerging stocks fell 1 percent and MSCI's broadest
index of Asia-Pacific shares outside Japan
posted its biggest fall in more than a month as it lost 1.4
percent. Tokyo's Nikkei shed 1 percent as Japanese GDP
figures also disappointed.
Wall Street was expected to dip about 0.2 percent when
trading resumes. The S&P 500 hit its latest all-time high
on Friday, underscoring how recent market jitters have driven
investors back into more predictable economies.
Part of the attraction is that central banks such as the
Federal Reserve, European Central Bank (ECB) and Bank of England
have promised to keep interest rates down for as long as they
There was a shot across the bows for that tactic over the
weekend, however, from the central bank of central banks, the
Bank of International Settlements, warning it raised "the risk
of an unhealthy accumulation of financial imbalances".
China's export woes also cast a cloud over currency markets.
The yuan fell as much as 0.5 percent and Chinese
short-term rates dropped after another low daily yuan rate from
China's central bank added to speculation Beijing is quietly
easing monetary policy to buttress wobbly growth.
The Australian and Canadian dollars, which are highly
sensitive to China's fortunes, lost as much as half a percent,
while the dollar and Russia's rouble were both
steady amid the lull in Ukraine.
The euro was steady at $1.3882 after hitting a 2-1/2
year high peak on Friday. Rate cut bets have been significantly
scaled back since the ECB suggested last week that the euro zone
recovery was on track.
Focus was turning to a meeting of euro zone finance
ministers on Tuesday in Brussels over plans to wind down
troubled banks. It will comes alongside more details on the
ECB's stress tests of the banking sector.
Gold edged lower for a second straight session after
the strong U.S. jobs data on Friday eased fears of an economic
slowdown and dimmed the metal's safe-haven appeal.
However, the crisis in Ukraine was likely to remain a
crucial factor. Data from the Commodity Futures Trading showed
that hedge funds and money managers raised their bullish bets in
gold futures and options for a fourth consecutive week to their
highest in more than a year.
The Chinese data helped send Brent and U.S. crude oil
down 84 cents and $1.25 to $108.15 and $101.31 a
barrel respectively, ending two straight days of gains.
The biggest blow came in copper, however, as it hit an
eight-month low of $6,608 a tonne and Shanghai contracts dropped
by the 5 percent daily limit. As well as the weak export data,
there were also fears about copper finance deals after China's
first domestic bond default last week.
"Clearly there's an unwind of positioning in the credit
markets in China, and as a result of that, copper which was
being held as collateral against that credit is no longer
required," Guy Wolf, global head of market analytics at Marex