Metal prices hit
multi-year lows on Friday after weaker-than-expected data from China and
the euro zone raised concerns about global growth, but the U.S. dollar
rose as a Federal Reserve rate hike was still on the table.
London
copper fell to its lowest level since 2009 after a survey showed
China's factory sector contracted by the most in 15 months in July due
to shrinking orders, fuelling worries over demand in the top metals
consumer as stockpiles steadily mount.
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, below economists' estimate for a reading of 49.7. It was the fifth straight month below 50, the level which separates contraction from expansion.
Euro zone business activity also started the second half on a less secure footing than expected, hit by Greece's near-bankruptcy woes. Markit's flash PMI fell to 53.7 this month from June's four-year high of 54.2. A Reuters poll had predicted a more modest dip to 54.0.
While economies looked weaker in Europe and Asia, better-than-expected U.S. jobless claims kept the Federal Reserve on track for a rate hike in coming months.
In a busy day for corporate updates on Friday, BASF (BASFn.DE), the world's largest chemicals firm by sales, slightly missed expectations with a 2 percent rise in operating profit, with profits of French food group Danone (DANO.PA) also falling short of expectations.
The pan-European FTSEurofirst 300 .FTEU3 hit a one-week low early in the day , but quickly rebounded to trade 0.2 percent higher at 1582.67. Euro zone bond yields fell.
"We should keep in mind that the ECB (European Central Bank)has quite optimistic growth assumptions underlying their QE scheme," Commerzbank strategist Michael Leister said.
"So if we get a comprehensive set of disappointing data it will increase the expectation that the ECB will have to keep QE longer or increase the monthly size."
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, below economists' estimate for a reading of 49.7. It was the fifth straight month below 50, the level which separates contraction from expansion.
Euro zone business activity also started the second half on a less secure footing than expected, hit by Greece's near-bankruptcy woes. Markit's flash PMI fell to 53.7 this month from June's four-year high of 54.2. A Reuters poll had predicted a more modest dip to 54.0.
While economies looked weaker in Europe and Asia, better-than-expected U.S. jobless claims kept the Federal Reserve on track for a rate hike in coming months.
In a busy day for corporate updates on Friday, BASF (BASFn.DE), the world's largest chemicals firm by sales, slightly missed expectations with a 2 percent rise in operating profit, with profits of French food group Danone (DANO.PA) also falling short of expectations.
The pan-European FTSEurofirst 300 .FTEU3 hit a one-week low early in the day , but quickly rebounded to trade 0.2 percent higher at 1582.67. Euro zone bond yields fell.
"We should keep in mind that the ECB (European Central Bank)has quite optimistic growth assumptions underlying their QE scheme," Commerzbank strategist Michael Leister said.
"So if we get a comprehensive set of disappointing data it will increase the expectation that the ECB will have to keep QE longer or increase the monthly size."
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