European stocks decline as miners cool, gold rises

Sydney - European stocks slipped, dragged down by basic resources companies cooling off after recent gains and as the region’s single currency edged higher. Gold rose with oil and government bonds were mixed.

The Stoxx Europe 600 Index fell along with most major western European benchmark gauges, though moves were not large and echoed lackluster trading in Asia and the US a day earlier.

Futures also pointed to a lower opening for the S&P 500 Index, while the dollar and Treasuries edged downward. West Texas Intermediate crude started on the back foot but reversed during European hours. All eyes were on the rand as lawmakers prepared to decide the fate of President Jacob Zuma. The currency pared yesterday’s jump.

READ: Rand poised to surge if Zuma loses secret no-confidence ballot

Markets appear to be in a holding pattern, with investors seeking catalysts amid the summer slowdown. The focal point of this week looks set to be Friday’s US inflation data, which may be key to the interest rate outlook of the world’s biggest economy.

Two Federal Reserve officials said on Monday that soft US inflation was a problem, but played down the risk of market disruption when the central bank starts shrinking its balance sheet.

Meanwhile, the latest economic data out of China pointed to steady global demand. The trade surplus in the world’s second-largest economy widened for a fifth month in July as demand for Chinese goods held up in the face of escalating tensions with the US

Also among the key events looming this week:

• UK factory output for June is due on Thursday, with industrial production for Italy on Wednesday and for France on Friday.

• This week’s Fed speakers aren’t done: keep a keen ear out for comments by New York Fed boss Bill Dudley on Thursday.

• Dutch Prime Minister Mark Rutte resumes talks to form a coalition government on Wednesday.

• Argentina, Mexico, New Zealand, Peru, the Philippines, Serbia and Zambia set monetary policy.

And here are the main moves in markets:

Asia

• Japan’s Topix index fell 0.2% at the close with SoftBank declining even after profit topped estimates.

• Sony gained after it was added to the JPX-Nikkei Index 400.

• Australia’s S&P/ASX 200 Index lost 0.5% and South Korea’s Kospi index dropped 0.2%.

• The Japanese yen increased 0.2% to ¥110.55/$.

Stocks

• The Stoxx Europe 600 Index dipped 0.1% as of 09:23.

• The MSCI All-Country World Index gained less than 0.05% to the highest on record.

• The UK’s FTSE 100 Index decreased 0.1%.

• Germany’s DAX Index sank 0.2%.

• Futures on the S&P 500 Index declined 0.1% to 2 475.25, the largest drop in more than a month on a closing basis.

Currencies

• The euro rose 0.1%.

• The Bloomberg Dollar Spot Index gained less than 0.05% to 1 159.97.

• The British pound climbed 0.1% to $1.3044.

• The rand sank 0.2% to R13.2396/$ after surging 1.7% on Monday.

Bonds

• The yield on 10-year Treasuries gained less than one basis point to 2.26%.

• Germany’s 10-year yield gained 204 basis points to 0.46%, the biggest climb in more than 13 months.

• Britain’s 10-year yield rose nine basis points to 1.14%.

Commodities

• Gold gained 0.2% to $1 260.24 an ounce.

• West Texas Intermediate crude rose 0.2% to $49.48 a barrel.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter: Fin24’s top stories