World stocks, copper, oil decline after weak China export data

By Caroline Valetkevitch

NEW YORK (Reuters) - Global stock indexes fell and the prices of copper and oil sank on Monday after surprisingly weak Chinese trade data added to worries about a slowdown in the world's second-largest economy.

China's exports unexpectedly tumbled in February, falling 18.1 percent from a year earlier and swinging the trade balance into deficit. The data underscored recent concerns about the outlook for China's economy, even though the Lunar New Year holidays were blamed for the slide.

The data put a 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 <.CSI300> plunged 3.3 percent to its lowest level in nearly nine months. Chinese gloom added to the strain in emerging markets, compounding worries that the U.S. Federal Reserve's reduction in stimulus will greatly curb the flow of money.

 

"The weak China trade balance data caused some flight to quality on less optimism about the global economy," said Jeffrey Young, interest rate strategist at Nomura in New York.

Prices on benchmark 10-year U.S. Treasuries were last up 3/32 to yield 2.78 percent.

The commodity-sensitive Australian and Canadian dollars declined, both losing as much as half a percent against the greenback in the wake of the plunge in exports from China.

In the U.S. stock market, the Dow Jones industrial average fell 82.96 points or 0.5 percent, to 16,369.76, the S&P 500 <.SPX> lost 6.41 points or 0.34 percent, to 1,871.63 and the Nasdaq Composite <.IXIC> dropped 16.561 points or 0.38 percent, to 4,319.662. The S&P 500 closed at a record high on Friday.

Shares of Freeport McMoRan Copper & Gold lost 3.2 percent to $31.16 as the signs of a slowing Chinese economy sent London copper to an eight-month low. The S&P materials index <.SPLRCM> lost 0.6 percent.

European shares, as measured by the pan-European FTSEurofirst 300 index <.FTEU3>, closed down 0.5 percent, hit by declines in shares of mining companies sensitive to China's ferocious appetite for raw materials. A global stock index was down 0.5 percent and an emerging market stock index <.MSCIEF> was down 1.3 percent.

German steel maker ThyssenKrupp , down 3 percent, was among the top losers in Europe as Chinese steel and iron ore futures slumped to their lowest levels ever on concerns about a slowdown in China, the world's top commodity buyer.

"Any poor news from China is always going to hit short-term market sentiment, especially in the mining sector, and fears of slower growth will hit base metals," said IPR Capital director Steven Mayne.

Adding to the day's concerns, in Crimea unidentified armed men fired in the air as they moved into a Ukrainian naval post, in the latest confrontation since Russian military groups seized control of the Black Sea peninsula.

Russia said the United States had spurned an invitation to hold new talks on resolving the crisis.

On Wall Street, Boeing Co shares lost 2.3 percent to $125.62 and were the biggest drag on the Dow and S&P 500, after the plane maker said late Friday that "hairline cracks" had been discovered in the wings of about 40 787 Dreamliners that are in production, another setback for the company's newest jet.

Separately, the disappearance of a Malaysian jetliner, a Boeing 777-200ER, is an "unprecedented aviation mystery," a senior official said on Monday.

Shares of Freescale Semiconductor were down 1.7 percent at $23. Twenty Freescale employees were on the missing Malaysian plane, mostly engineers and other experts working to make the company's chip facilities in Tianjin, China, and Kuala Lumpur more efficient, said Mitch Haws, vice president, global communications and investor relations.

CHINESE DATA WEIGHS ON AUSTRALIAN, CANADIAN DOLLARS

The Aussie traded 0.4 percent lower at $0.9031, while the loonie was down 0.2 percent at $1.1104.

"The Chinese export numbers are the main driver this morning - you can see that the Aussie and Canadian dollars are both under pressure," said Alvin Tann, strategist with French bank Societe Generale in London.

The yuan earlier 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 U.S. dollar held steady against major currencies, supported by hopes that U.S. job growth would pick up in the wake of last week's mildly encouraging report on hiring. The dollar index was little changed at 79.75.

In the metals markets, three-month copper on the London Metal Exchange closed at $6,649 a tonne from $6,782 at the close on Friday. It earlier slid as low as $6,608 a tonne, its weakest since June 25 and within a hair of nearly three-year lows.

Adding to the pressure was China's imports of unwrought copper, which fell 30 percent in February from January due to weak Shanghai copper prices. Imports were still up 27 percent from last year's levels.

The Chinese data also weighed on oil. Brent crude was trading 79 cents lower at $108.23. U.S. oil fell $1.25 to $101.33 a barrel.

(Additional reporting by Marc Jones in London and Sam Forgione and Richard Leong in New York; Editing by Leslie Adler and Chizu Nomiyama)