Global markets start the week slowly
HONG KONG - World stock markets were mixed in Monday trading as the yuan steadied and eurozone finance ministers approved giving Greece the first installment in its latest bailout.
As of 8:48 a.m. ET, European stocks were falling, with Germany's DAX down 0.9 percent to 10,877, Britain's FTSE 100 was down 0.6 percent to 6,516 and France's CAC 40 slipped 0.3 percent to 4,941. U.S. stocks were poised to open lower, with Dow futures down 0.4 percent, and the broader S&P 500 also dipping 0.4 percent after the New York state factory index fell to a low not seen since 2009.
European finance ministers on Friday approved the first 26 billion euros ($29 billion) that Greece needs to rebuild its economy. German lawmakers will decide on the package on Wednesday in a special parliamentary session, at which dozens of lawmakers from German Chancellor Angela Merkel's conservative bloc are expected to oppose it.
Chinese authorities raised by a smidgen the daily level for the country's currency, which is allowed to rise or fall by 2 percent against the dollar each day in the spot markets. Monday's rate fix further calmed Asian markets after Beijing last week devalued the yuan, which resulted in the currency weakening as much as 3 percent.
The Nikkei stock index rose 0.5 percent on Monday after government data showed Asia's second-biggest economy contracted 1.6 percent in the April-June quarter on bad weather and slowing China demand, raising hopes of fresh stimulus. Prime Minister Shinzo Abe has championed a huge monetary easing program aimed at kick-starting economic growth, but analysts say the poor results so far suggest that the central bank may pump in even more money in the months to come, a move that would also support the stock market.
"These numbers are in no way positive as the Japanese economy teeters on the brink of full contraction," said Stephen Innes, senior foreign exchange trader at OANDA. "The data continues to lend support for additional quantitative easing in Japan."
Shares of Tianjin Port Development Holdings tumbled 13 percent as worries deepened over last week's huge explosions at the busy Chinese port city. The blasts, which originated at a warehouse storing more hazardous material than permitted, left at least 114 people dead and 70 missing.
Japan's benchmark Nikkei 225 index rose 0.5 percent to close at 20,620, while South Korea's Kospi slipped 0.8 percent to 1,969. Hong Kong's Hang Seng fell 0.7 percent to 23,815, and the Shanghai Composite Index in mainland China added 0.7 percent to 3,994. Australia's S&P/ASX 200 rose 0.2 percent to 5,368.
U.S. crude oil fell 68 cents to $41.82 in electronic trading on the New York Mercantile Exchange. The contract rose 27 cents Friday to close at $42.50. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 58 cents to $48.61 in London.