Global stocks drop as shutdown looms; Treasuries erase gains

Italian Stocks

Italy’s FTSE MIB Index slid 1.2% as Mediaset SpA and Unione di Banche Italiane lost more than 4% to lead declines. Telecom Italia SpA rose 5.2% as a person with knowledge of the matter said Chief Executive Officer Franco Bernabe plans to resign this week.

Italy’s 10-year yield jumped as much as 24 basis points to 4.66%, the highest since June 27, before paring gains and trading at 4.43%.

The cost of insuring against losses on Italian government debt climbed to the highest since July, with credit-default swaps linked to the sovereign bonds rising 4.9 basis points to close at 266.09 basis points, according to prices compiled by Bloomberg.

The Stoxx Europe 600 Index declined 0.6% to the lowest level in more than two weeks. Rio Tinto Group led mining shares lower as a measure of Chinese manufacturing compiled by HSBC Holdings Plc and Markit Economics missed a preliminary estimate.

The Stoxx 600 has still climbed 4.4% in September. The gauge has rallied 8.9% since the end of June, on course for the biggest quarterly gain in four years.

The MSCI Emerging Markets Index fell 1%, the biggest drop in a month. The PCOMP Index in the Philippines slumped 3%, the most in September.

China Manufacturing

HSBC Holdings Plc and Markit Economics said today that their manufacturing purchasing managers’ index for China delivered a reading of 50.2 for September, falling short of an estimate of 51.2 in Bloomberg survey. Fifty is the threshold between contraction and expansion. A report in Japan showed industrial production unexpectedly fell 0.2% in August from a year ago, after rising 1.8% in July. Analysts surveyed by Bloomberg called for a 0.5% gain.

The S&P GSCI Index of commodities dropped 0.6%, trimming the gain for this quarter to 3.5%, the most in a year. WTI crude oil lost 0.3% to $102.57 a barrel, the lowest on a closing basis since July 3. Brent futures lost 0.1% to $108.48 a barrel, while contracts on gasoline slipped 1.6%.

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