OPEC and Italian unease weighing on global stocks
LONDON (AP) -- Uncertainty over whether OPEC countries will back an oil production cut at their meeting this week, as intended, weighed on global stock markets on Monday. Worries over next week's constitutional referendum in Italy also kept investors at bay.
KEEPING SCORE: In Europe, Germany's DAX index was down 0.7 percent to 10,630 while the CAC 40 in France fell 0.5 percent to 4,526. The FTSE 100 index of leading British shares was 0.3 percent lower at 6,819. U.S. stock markets were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.2 percent. On Friday, the Dow and the S&P both hit fresh highs.
OPEC WATCH: Major oil producers from the Organization of the Petroleum Exporting Countries meet Wednesday to discuss output cuts to shore up prices, but Iran and Iraq have so far failed to agree to a reduction, raising doubts over the Vienna meeting's outcome. OPEC's top producer, Saudi Arabia, has suggested it might be open to no output cut, departing from previous statements in a move analysts said makes an agreement less likely. The Saudis also pulled out of a meeting with Russia and other large non-OPEC producers, leaving all decisions to the Vienna meeting. Oil prices have been exceptionally volatile amid the uncertainty, falling sharply in early Monday trading before recovering. The benchmark New York rate was up 34 cents at $46.40 a barrel while Brent, the international standard, was 54 cents higher at $48.79.
ITALY VOTE: On Dec. 4, Italians vote on constitutional changes that would limit the power of the upper house and make it easier for governments to pass legislation. Prime Minister Matteo Renzi has said he will resign in case of a "no" result. New elections, if held, could bring to power the Five Star Movement, which has said it wants to hold a referendum on euro membership.
ANALYST TAKE: "Equities have started the week on the back foot, with investors concerned about Wednesday's OPEC meeting being a waste of time and next Sunday's Italian referendum having potential to send shivers through Europe's banking sector," said Mike van Dulken, Head of Research at Accendo Markets.
YUAN REBOUND: China's yuan rebounded from an eight-year low against the U.S. dollar after a central bank official said Beijing wants it to remain stable. The yuan's exchange rate is based on a basket dominated by the American currency and has been dragged up by the dollar's rise while other developing country currencies have weakened. On Monday, the middle point of the narrow band in which the yuan is allowed to fluctuate against the dollar rose by just over 0.1 percent to 6.9042 to the dollar. That came after Yi Gang, a deputy central bank governor, was quoted on the bank's website as saying the yuan has "characteristics of a strong and stable currency" and was likely to "remain relatively stable at a reasonable and balanced level."
ASIA'S DAY: The Shanghai Composite Index gained 0.5 percent to 3,277.00 and Hong Kong's Hang Seng index also advanced 0.5 percent to 22,830.57. Tokyo's Nikkei 225 gave up 0.1 percent to 18,356.89 and Sydney's S&P-ASX 200 retreated 0.8 percent to 5,464.40. Benchmarks in Manila and Jakarta also declined. Seoul's Kospi added 0.2 percent to 1,978.13 and India's Sensex rose 0.1 percent to 26,343.54.
CURRENCIES: The euro slipped 0.1 percent to $1.0587 while the dollar fell 0.5 percent to 112.65 yen.