Bloomberg News
– European Stocks Rebound From Weekly Drop as Miners Lead Gains. The Stoxx Europe 600 Index advanced 0.3 percent to 354.12 at 1:17 p.m. in London, after earlier rising as much as 1.2 percent. European stocks tumbled on Friday, deepening a weekly loss amid mixed U.S. jobs data as concern about the strength of the global economy and an impending Federal Reserve rate increase returned to center stage. The volume of shares changing hands was 28 percent lower than the daily average today. A measure of European-stock volatility rose 1.2 percent. U.S. markets are closed for a holiday.
– China’s Foreign Exchange Reserves Fall in August on Yuan Support. China’s foreign-exchange reserves fell by a record last month as the central bank sold dollars to support the yuan after the biggest devaluation in two decades spurred bets on continued weakness.
The currency hoard declined by $93.9 billion to $3.56 trillion at the end of August, from $3.65 trillion a month earlier. Economists surveyed by Bloomberg had forecast a median $3.58 trillion. The yuan weakened in offshore trading and 10-year Treasury futures contracts fell after the data.
– Charting the Markets: China Respite Over. China is back. Local markets re-opened after holidays on Thursday and Friday to commemorate the end of World War II. The rout in Chinese equities is close to ending. At least that’s the view of People’s Bank of China Governor Zhou Xiaochuan, who issued a statement at the G-20 summit in Ankara over the weekend. He also said that state intervention prevented systemic risk and stopped a free-fall. His words had a mixed effect on markets. Asian stocks dropped. European equities bounced back from the third weekly decline in four. Appetite for risk lifted the Norwegian krone, as well as the Australian and Canadian dollars.
The index has already slumped 22 percent since China devalued the yuan. It’s trading 40 percent below the record set on June 12th. Attention now turns to Tuesday’s trade data, which may show another weakening in exports.
CNN Money
– Beijing calls stock bubble over, markets disagree. The Shanghai Composite closed down 2.5% amid choppy trading as investors returned from a four-day holiday. Zhou Xiaochuan, the governor of the People’s Bank of China, told G-20 central bankers and finance ministers on Saturday that the «corrective process» in China’s stock market was nearly complete.
«Market leverage has fallen sharply since the correction, but this has not incurred any notable impact on the real economy,» Zhou said (…) The index has lost roughly 40% of its value since mid-June, leading regulators to step in with a bailout package.
The China Securities Regulatory Commission acknowledged Sunday that a bubble had formed, making subsequent «plunges and adjustments» inevitable. The regulator said that Shanghai’s average price-to-earnings ratio, which measures how much investors are getting for their money, had declined from 25 to 15.6 after recent losses.
– Tesco quits South Korea in $6 billion deal. Asian buyout firm MBK Partners is leading the $6.1 billion deal to acquire discount retailer Homeplus from the British supermarket chain. The sale will help Tesco (TSCDY) reduce its debt, which totaled nearly $13 billion at the end of February.
«This sale… allows us to make significant progress on our strategic priority of protecting and strengthening our balance sheet,» said Tesco CEO Dave Lewis.