File photo File photo
World share markets fell on Monday as investors switched their focus away from solid U.S. economic growth in the third quarter to the weak state of global corporate earnings.
But activity everywhere was expected to be thin as a massive hurricane closed in on the U.S. East Coast causing regulators to close stock and options trading on Wall Street.
The FTSE Eurofirst 300 index index of top European shares followed Asian markets lower, dropping 0.2 percent to 1095,39 points in early trade. London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX opened down between 0.3 and 0.7 percent.
Traders said in addition to the weak earnings reports, attention was on the bilateral talks on Monday between Spanish Prime Minister Mariano Rajoy and his Italian counterpart Mario Monti, with Madrid under pressure to seek a sovereign bailout.
“The focus is still on Spain, and it's been a fairly mixed bunch of results from European companies,” said Berkeley Futures associate director Richard Griffiths, who added that European equities would find it hard to make much progress this week.
German government bonds also hit two-week highs in early European trade as the weakness on the equity markets spurred bids for less risky assets.
The euro was down 0.3 percent at $1.2890, at the lower end of its recent broad range between $1.28 and $1.31, waiting for bailout prospects for Spain and Greece to become clear.
While the dollar steadied at 79.63 yen, off a four-month high of 80.38 yen touched on Friday, ahead of the Bank of Japan's policy decision on Tuesday. Markets expect the BOJ to take further easing measures.
Brent crude oil fell $1.04 to $108.51 a barrel as markets braced for the impact of Hurricane Sandy, which could hit demand in the world's largest oil consumer. Refineries along the U.S. East Coast have already begun winding down operations.
Commodities were also capped by fears that rising evidence of weak corporate earnings around the world suggested demand would slow, with London copper falling to its lowest level since Sept. 7 at $7,755 a tonne.
“People can't really see much optimism out there. We wanted the U.S. corporate earnings to be a little more robust,” said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin. -Reuters