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GLOBAL MARKETS-Grim China data keeps stimulus hopes alive

Published 10/08/2015, 06:29 pm
Updated 10/08/2015, 06:36 pm
© Reuters.  GLOBAL MARKETS-Grim China data keeps stimulus hopes alive
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* Some stock markets prosper, commodities take a hit

* Europe off to subdued start, mining stocks fall

* Some optimism over Greece

* Malaysian ringgit plumbs 17-year lows

By Lionel Laurent

LONDON, Aug 10 (Reuters) - A deepening slowdown in demand in China took centre-stage on Monday, boosting some stock markets on hopes of more policy stimulus even as it knocked commodity prices.

China's stock markets bucked broad cautiousness in Asian equities with major indices up between 2 and 4 percent, while European trading got off to a subdued start as mining and energy stocks pulled the pan-European FTSEurofirst 300 equity index .FTEU3 down 0.2 percent.

Chinese producer prices in July hit their lowest point since late 2009 and exports tumbled 8.3 percent in the same month, stoking expectations of more action from the central bank after months of intervention by the authorities to tame China's unruly stock market.

"Expectations of further easing are building and announcements of liberalisation have boosted the equity market," said Kit Juckes, senior FX strategist at Societe Generale (PARIS:SOGN) in London.

The outlook in China contrasted with solid U.S. data on Friday that appeared to keep expectations on track for an interest rate rise as early as September.

The dollar stayed close to a nearly four-month high against a basket of currencies on Monday, while 10-year German and U.S. Treasury yields were one basis point higher.

"The dislocation from a strong dollar, rising long rates and falling oil prices is still being factored into share prices in our view," said Sean Darby, strategist at Jefferies.

The MSCI All-Country World index .MIWD00000PUS was flat, while emerging-market equities were up 0.1 percent.

There was also some optimism over Greece, where official comments pointed to a speedy wrap-up of bailout talks designed to save the country from financial ruin.

Commodity prices took a hit: London copper traded at six-year lows and crude oil futures touched fresh multi-month lows. London-listed mining shares like BHP Billiton BLT.L and Anglo American AAL.L fell more than 2 percent.

The Malaysian ringgit plumbed lows last seen during the Asian financial crisis 17 years ago, after a fall in foreign exchange reserves raised doubts over the currency's ability to withstand pressure from political uncertainty and slower growth.

The Turkish lira was a touch higher despite an attack on the U.S. consulate building in Istanbul, while 10 people were injured in a car bombing at a police station overnight, weeks after Turkey launched what it described as a "synchronised war on terror".

(Editing by Keith Weir)

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