European stocks fell sharply on Tuesday amid concerns China’s slowdown will hurt outlook for European exporters. Euro strengthened against the dollar. The Stoxx Europe 600 fell 2.7%, Germany’s DAX 30 dropped 2.4%. China is a key market for mining companies and luxury-goods producers. Miners were hit hard, with shares of metal producer Anglo American PLC tumbling 7.6%, Glencore sinking 8.4% and Rio Tinto PLC slumping 4.9%. Britain’s Burberry Group lost 5%, and France’s Christian Dior fell 3.2%. Today at 10:00 CET July producer price index will be released in euro-zone. The tentative outlook is negative. At 9:30 CET second quarter UK construction PMI will be released by Markit. The tentative outlook is positive.
Nikkei fell 0.4% today as yen weakened against the dollar. Shares of companies with exposure to China such as oil companies, steelmakers and shippers led the decliners. Tomorrow at 02:30 CET Bank of Japan board member Takahide Kiuchi speaks in Aomori. At 2:35 CET August Services and composite PMI will be released by Markit.
Oil prices are extending losses today after falling about 8% on Tuesday following a 25% three day surge. Oil prices fell after the American Petroleum Institute report on Tuesday showed US crude stocks surged by 7.6 million barrels to 456.9 million in the last week. Upcoming Energy Information Administration report on US crude oil inventories today at 15:30 CET will determine whether prices will remain under pressure if oil inventories are higher.
Gold futures prices are edging higher after settling at their highest level in more than two weeks on Tuesday. The selloff in global stock markets boosted the metal’s investment appeal. As the wedding season in India approaches increased physical demand for gold is expected to provide additional support for the metal.
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