GLOBAL MARKETS-Stocks head for worst quarter since euro crisis, dollar reigns
* Share (Frankfurt: 5CI.F - news) markets mixed amid uncertainty over Hong Kong,
quarter end
* Euro zone awaits inflation data
* HSBC manufacturing survey disappoints, but exports improve
* Dollar holds hefty gains for the month, pressures
commodities
By Marc Jones
LONDON, Sept 30 (Reuters) - World markets (Xetra: 4WM.DE - news) were in hesitant
mood on Tuesday as investors wondered what China's response
would be to civil unrest in Hong Kong, while the U.S. dollar
eased off the throttle after its biggest quarterly gain in six
years.
Like most corners of the world, Europe saw limited appetite
for risk early on before euro zone inflation data and
after what has been the toughest quarter for global stocks since
the peak of the euro crisis.
The FTSEurofirst 300 index of top European shares
started up 0.2 percent at 1,374.36 points, but it was barely
changed on the month despite this month's interest rate cut and
new dump of cheap funding from the European Central Bank.
German government bonds, Europe's benchmark in
the fixed income market, were also set for their first rise in
yields in seven months while the euro was staring at its biggest
monthly drop since February 2013.
"Each time we have seen market consolidations this year,
there has been an upward readjustment just a few weeks later.
Will this time be different? I'm not convinced," said Yannick
Naud, portfolio manager at Sturgeon Capital in London.
On a broader scale, MSCI (NYSE: MSCI - news) 's 45-country All World stock index
, was on course for a drop of almost 3 percent on
the month and its and biggest quarterly fall since Q2 2012 when
the euro zone's debt crisis was at its most intense.
As well as signs the era of record low interest rates is
finally coming to an end in the world's largest economy, the
United States, investors have also had to cope with a host of
global geopolitical difficulties in recent months.
In the latest of those tensions, tens of thousands of
pro-democracy protesters blocked Hong Kong streets on Tuesday,
in one of the biggest political challenges to Beijing since the
Tiananmen Square crackdown 25 years ago.
Hong Kong's Hang Seng Index shed another 1.3 percent
to its lowest in three months. MSCI's broadest index of
Asia-Pacific shares outside Japan lost 0.3
percent having already fallen sharply on Monday.
The unrest was an added complication for investors amid
long-standing concerns about the health of China's economy.
An HSBC survey of manufacturing (PMI) for September
disappointed slightly by showing a final reading of 50.2, steady
on August but down from its preliminary 50.5.
One bright spot was a measure of new export orders which
climbed to a 4-1/2-year-high of 54.5. The official version of
the PMI is due on Wednesday and analysts look for a steady
outcome around 51.0.
Chinese shares have been less troubled by events in Hong
Kong, perhaps because news and images of the protests are hard
to come by on the mainland. The Shanghai index inched up
0.1 percent to near a 19-month peak.
DOLLAR ON A ROLL
The U.S. dollar hovered at a four-year peak against a basket
of major currencies and its gains of 3.5 percent so far
this month were the largest since February 2013 and in six years
on a quarterly basis.
The scale of the gains tempted profit-takers on Tuesday and
the dollar took a small step back to 109.42 yen and off a
six-year high of 109.75 hit overnight.
The euro came within a whisker of its November 2012 trough
of $1.2661 before edging back up to $1.2678.
Investors awaited September inflation data for the euro zone
due at 0900 GMT, seeking cues on the likely response from the
ECB when it meets in Naples on Thursday.
One of the worst-performing major currencies this month was
the New Zealand dollar, which is down nearly 7 percent.
Data on Monday confirming the Reserve Bank of New Zealand
had intervened to weaken the currency sent it as low as $0.7708
, before a bounce to $0.7802.
The stronger U.S. dollar has been a heavy weight on many
commodities since it makes them more expensive for buyers using
other currencies.
Spot gold was down at $1,216.50 an ounce, not far
from last week's trough at $1,206.85 and poised to post its
sharpest monthly loss since June 2013.
U.S. crude oil eased a couple of cents to $94.55 a
barrel, after managing a modest rally on Monday. Brent
nudged up 5 cents to $97.25 but remained uncomfortably close to
its recent two-year low.
Oil prices on both sides of the Atlantic were on track for
their third monthly loss in a row due to ample supply and
subdued demand in Europe and China.
(Additional reporting by Lionel Laurent; Editing by Angus
MacSwan)