Global shares shrug off mixed China data, copper teeters near six-year low

By Marc Jones

LONDON (Reuters) - Copper prices teetered near a six-year low on Wednesday as the dollar pulled back slightly, after mixed Chinese data showed growth in the world's second-biggest economy was still in low gear.

China's October industrial production growth cooled to 5.6 percent year-on-year, slightly lower than the 5.8 percent gain economists polled by Reuters had expected, though it was cushioned by a just-above-forecast 11 percent jump in retail sales.

That left financial markets with a divided feel as the prospect of the first rise in U.S. interest rates in almost a decade but also another shot of stimulus from the European Central Bank continued to muddy the waters too.

Chinese shares <.CSI300><.SSEC> saw a late rally to end the day marginally higher, while London's FTSE (FTSE), Germany's DAX (GDAXI) and France's CAC40 (FCHI) started up 0.4, 0.9 and 0.6 percent respectively to put Europe on the front foot.

Benchmark U.S. and European bond market yields [GVD/EUR] and the euro began to edge up as the appetite for risk started to pick up again, though the wobbles in China left copper near its lowest since mid-2009 at $4,917 a ton.

"China's recovery is slow. It's really affecting all the base metals," said analyst Helen Lau of broker Argonaut Securities in Hong Kong.

In the currency markets, the dollar - on a charge since strong U.S. jobs data last week boosted the chances of Federal Reserve rate hike next month - took a bit of a breather.

The dollar index (DXY) eased away from a seven-month peak to slip 0.4 percent to 98.883. The U.S. currency ran into a little profit-taking against the yen, nudging it down 0.3 percent to 122.86 , from an early 123.15.

That gave some respite to emerging market currencies in Asia [EMRG/FRX] and the euro traded back above $1.0740 ahead of a speech in London by ECB President Mario Draghi and in Madrid by the bank's number two, Vitor Constancio.

"Market expectations of further ECB QE are high," said Alan Higgins, chief investment officer at Coutts in London. "He (Draghi) has to deliver (at next month's ECB meeting) and it has to be something substantial otherwise the euro is going to shoot up."

STERLING STRUGGLES

Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) ended barely changed as China's late bounce and modest gains in Australia and in Tokyo (N225) offset a 1.4 percent drop in Taiwan. (TWII).

A Reuters survey showed confidence among Japanese manufacturers fell in November for a third straight month to levels unseen in about 2-1/2 years, evidence that concerns about Chinese demand linger.

Bank in Europe, sterling lost some of the ground it had made overnight, drooping as low as $1.5131 after UK jobs data showed wages growing more slowly than expected despite the lowest level of unemployment since early 2008.

Portuguese bond yields rose back towards four-month highs after left-wing parties ousted the austerity-minded centre-right government in Lisbon.

Two-year German government bond yields, meanwhile, slipped to within a whisker of recent record lows amid mounting expectations of further ECB stimulus.

The U.S. Treasury market is closed on Wednesday for Veterans Day, but Wall Street will be open.

In commodities, the firm dollar continued to weigh on prices with zinc at its lowest in over five years.

Oil prices resumed their decline on news U.S. crude stocks jumped last week. U.S. crude (CLc1) lost 46 cents to $43.75 a barrel, while Brent (LCOc1) shed 22 cents to $47.22.