Hong Kong protests weighing on global markets

Protesters clash with riot police on Sept. 27, 2014, in Hong Kong.

Anthony Kwan/Getty Images

LONDON - At the start of a busy week on the economic news front, global stock markets have largely edged down as investors fret over the pro-democracy protests in Hong Kong, where the main Hang Seng index closed down 1.9 percent on Monday at 23,229.21.

In Europe the CAC-40 in France was 0.7 percent lower at 4,365 while Germany's DAX fell the same rate to 9,429. The FTSE 100 of leading British shares was 0.3 percent lower at 6,627. Wall Street was poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.7 percent.

Pro-democracy protests escalated Monday, raising concerns business in this Asian financial hub might be disrupted. In a rare scene of disorder, thousands of people took to the streets over the weekend in a challenge against Beijing's decision to limit political reforms. Police fired tear gas and detained 78 protesters but failed to break up the rally.

"Sentiment is downbeat for a variety of reasons, not least due to the growing unrest in Hong Kong," said Fawad Razaqzada, technical analyst at Forex.com.

Concerns over the situation in Hong Kong weighed on most markets in Asia. Australia's S&P/ASX 200 fell 0.9 percent to 5,269.60 and stocks in Taipei, Seoul and Singapore also edged down. However, Japan's Nikkei 225 index rose 0.5 percent to 16,310.64 and China's Shanghai Composite added 0.4 percent to 2,357.71.

As well as monitoring developments in Hong Kong as well as other geopolitical hotspots around the world, investors have a raft of economic news to digest.

As well as Thursday's monthly policy meeting of the European Central Bank, there's a flow of U.S. economic data that culminates Friday with the nonfarm payrolls report for September. That often sets the market tone for a week or two as traders assess what impact it may have on the policy of the Federal Reserve. Last month's 142,000 increase was lower than anticipated and pushed out market expectations of when the central bank will start raising interest rates. Traders will want to see whether August's modest increase was a one-off or the start of a period of slower jobs growth in the world's largest economy.

The dollar could be a key mover in the wake of the payrolls figures. On Monday, the euro was up 0.2 percent at $1.2700 while the dollar was flat at 109.21 yen. The dollar has been in the ascendant over the past few months as the U.S. economy has outperformed its major competitors and as traders price in the prospect of interest rate increases from the Fed in contrast to the European Central Bank and the Bank of Japan where monetary policy remains super-cheap and easy.

Benchmark U.S. crude oil fell 25 cents to $93.29 per barrel on the New York Mercantile Exchange.