Chinese shares rose and maintained their gains in the early Asian trading session after a six-day losing streak, despite increased volatility and soft economic data. Weak Chinese imports have capped gains, after the data raised fears of further slowdown in one of the world’s largest economies. Despite the uptick in China’s exports during the month of August, the decline in imports indicates economic weakness. However, some analysts are expecting further easing measures from the government, as revealed by a Reuters poll. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, but still remained near a three-year low reached two weeks ago. The Japanese Nikkei fell 2.3% after rebounding from a seven-month low reached on Monday. The SSE (LONDON:SSE) Composite added 90 points, or nearly 3%, to trade at 3,170.45, and the Hang Seng added 406 points, or nearly 2%, to trade at 20,990.36.
European stock markets started the week with gains after mixed sentiments from last week. The Stoxx Europe 600 added 0.5% to trade at 354.8,1 as all sectors except for oil and gas closed the day with gains due to falling energy prices. Glencore (LONDON:GLEN) closed the day near the top of the Stoxx 600 after its shares rose 7% following the announcement of measures to be taken on reducing its $20 billion debt. The UK’s FTSE 100 also rose 0.5% to trade at 6,074.52 as it was aided by Glencore’s rally. The German DAX 30 added 0.7% to trade at 10,208.61 and the French CAC 40 gained 0.6% to trade at 4,549.64. European markets are expected to follow China’s positive lead when they open on Tuesday.
The U.S. dollar remained steady against other currencies on Monday while markets remained closed for Labor Day. The dollar index stood at 95.813 with little change from the end of last week. The dollar edged up on the safe-haven Japanese yen, rising to 119.07 yen as it pares half of its Friday losses. The euro barely moved against the dollar as it trades at $1.1167.
Oil declined more than 3% on Monday as weak Chinese equities and record-high production caused oversupply concerns. Brent futures for October fell $1.98, or 3.73%, to trade at $47.76 a barrel. Crude oil fell $1.8 to settle at $44.25 a barrel amid low trading volume due to the U.S. Labor Day holiday. Oil fell nearly 60% since June 2014 as global supplies rose without a matching rise in demand. The slowing Chinese economy has created concerns that the second-largest economy in the world would reduce its energy needs, leaving the markets in a highly oversupplied state.
Eurozone GDP data will be released today, followed by the Canadian Central Bank’s interest rate decision on Wednesday. Eurozone inflation data will be released on Friday.