Markets closed mixed at the start of the week after disappointing data from China caused investors to worry about the state of the global economy. “The dollar surged on news that China's new bank loans tumbled in July even as policymakers cut interest rates. Investors also feared that trouble at the nation's largest private property developer, Country Garden (HK:2007), could have a chilling effect on home buyers and financial institutions,” Reuters reported. This caused the greenback to hit a one-month high, while Wall Street closed up slightly “as a 7% surge in chipmaker Nvidia (NASDAQ:NVDA) helped push megacap growth stocks higher,” added Reuters.
European markets also closed in positive territory on Monday, with the benchmark STOXX 600 up 0.10% and the German DAX up by 0.50%. Especially after Exor announced that it will pay $2.8 billion to acquire a 15% stake in Philips, which caused the company's shares to increase by 4.30%. In economic news, Germany's wholesale prices fell by 2.80% y/y in July 2023, marking the fourth consecutive month of declines, following a 2.90% fall in the previous month.
However, Asian markets closed in the red on Monday after growing indications that the Chinese economy is struggling to get back to pre-pandemic levels and as the property crisis in the country deepened. In July, consumer and producer prices declined, exports decreased to their lowest level since February 2020, and bank loans in the nation hit a 14-year low. The Hang Seng fell 1.58% on Monday, while Japan’s Nikkei fell 1.27% as investors prepared for the release of the country’s second-quarter GDP data scheduled for today and the country's inflation reading expected on Friday.
The FTSE/JSE All Share Index also closed down on Monday, about 1.10% lower, after declines in the resource and financial sectors. A stronger dollar also pressured the rand, which weakened to R19.05/$ at 21h45 local time.
In commodities, gold was trading at $1 907 a barrel while Brent crude was at $86.07 an ounce at 22h25 local time. According to Reuters: “Oil prices were down on Monday also on China worries, as concerns about the nation's ability to bounce back to pre-pandemic levels outweighed gains previously posted on tighter supply.”
