Market Buzz: Negative outlook on weak data from China

Weak data from China is expected to drag down Russian stocks on Monday – the main indices traded in the red at the opening of the market session.

Russian stocks likewise closed in the red on Friday: The MICEX lost 1.13% and the RTS was down 1.93% on weaker data from the eurozone and the US. Energy firms such as OGK-2, MRSK Center of Volga Region, Inter RAO EES and RAO ES of the East lost the most, upwards of 7%.

Asian floors reacted to weaker-than-expected economic growth and industrial production in China, Asia’s largest economy, dropping sharply on Monday. 

Indicators revealed that economic growth in China has slowed, expanding by only 7.7% in Q1 of this year instead of the expected 8% growth. Industrial output was expected to expand by 10%, but only rose by 8.9%. 

This prompted more active selloffs in the region, which has already been influenced by the stronger yen and a drop in commodity prices. A raft of weak economic data from the US released on Friday also triggered negative sentiments.

Japanese stocks opened lower Monday due to a rebound in the yen, and the Nikkei has lost 1.2%. The Shanghai Composite lost 0.9% and Hong Kong’s Hang Seng dropped by 1.3%. South Korea’s KOSPI is also in the red, losing 0.49%, while the Australian ASX/S&P200 slid by 1.57%.

Europe also mostly saw losses Friday on news of the Cyprus bailout. London's FTSE 100 closed 0.49% lower, sliding to 6,384.39, the German DAX 30 slumped 1.61% to 7,744.77 and the CAC 40 lost 1.23% to 3,729.30. The euro weakened against the US dollar, dropping to $1.3092 from $1.3103 late Thursday. 

On Monday, investors will be eyeing a February update for the EU’s trade balance. No other big news is expected from the region. In Russian corporate news, financial statements from OGK-2 and Inter RAO EES are expected on Monday.

Wall Street closed modestly lower Friday after two days of record performances for benchmark indices. The price of gold plunged 5% to $1,487 per ounce. The Dow ended Friday at 14,855.06, the S&P 500 fell 4.52 points, 0.3%, to 1,588.85, and the Nasdaq composite index was down 5.21 points, 0.2%, to 3,294.95. The yield on 10-year US Treasury notes finished at 1.72%, from 1.79% Thursday.

Oil is currently trading in the red, with Brent down by 1.67% and Light losing 2.6%.