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- An index of Asian shares outside Japan fell close to this year’s lows thanks to a deepening selloff in commodities and concerns over slowing growth in China, while the dollar held its ground against a basket of currencies. China’s factory activity shrank more than initially estimated in July, contracting by the most in two years as new orders fell, according to a private survey that dashed hopes that the economy may be steadying.
- Greece will take another step away from full-on crisis mode on Monday by opening its stock market for the first time in five weeks, although immediate heavy losses are expected. Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece’s banks and hurl the indebted country out of the euro zone. Since then, Athens has agreed a framework bailout plan with its European Union partners in exchange for stringent reforms and budget austerity. But implementation of the deal is some way off, keeping alive political and economic stability concerns. Market players in Greece and elsewhere are expecting stocks to fall sharply when the market opens at 0730 GMT (3:30 a.m. EDT).
- China’s factory activity shrank more than initially estimated in July, contracting by the most in two years as new orders fell and dashing hopes that the world’s second-largest economy may be steadying, a private survey showed on Monday. The report followed a downbeat official survey on Saturday which showed growth at manufacturing firms unexpectedly stalled, reinforcing views that the cooling economy needs more stimulus even as it faces fresh risks from a stock market slump. Fears of a full-blown market crash have added a new sense of urgency for policymakers in Beijing, with many analysts expecting more support measures to be rolled out within weeks. The final, private Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.8 in July, the lowest since July 2013, from 49.4 in June. New orders reversed into contraction last month after growing in June, while factory output shrank for the third consecutive month to hit a trough of 47.1, a level not seen in more than 3-1/2 years.
- Oil extended losses on Monday on worries of oversupply as the Organization of the Petroleum Exporting Countries pumped at record levels in July, while weak China data stoked concerns about slower growth at the world’s second largest oil consumer. Saudi Arabia and other key members of OPEC show no sign of wavering in their focus on defending market share instead of prices, as the group’s oil output hit the highest monthly level in recent history in July, a Reuters survey showed. The lack of a plan by OPEC to make room for the return of more Iranian oil fueled supply worries. Iran expects to raise output by 500,000 barrels per day (bpd) as soon as sanctions are lifted and by a million bpd within months, Oil Minister Bijan Zanganeh said in remarks broadcast on Sunday. Hedge funds and other speculators have slashed their bullish exposure to U.S. crude to the lowest in nearly five years, trade data showed on Friday, as local drillers continue to add rigs and pump at full throttle despite a global oil glut.