Daytrading September 8 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares face a subdued start after weakness in key commodities and Chinese equities offset a partial rebound on European markets while Wall Street was closed for Labor Day.

The September SPI200 futures contract eased three points or less than 0.1% to 5019 as oil and most metals retreated on light holiday volume.

European markets shrugged off negative leads from Asia to claw back some of Friday's heavy losses, which were triggered by mixed US jobs data and a soft German factory reading. The Stoxx Europe 600, which tumbled 2.52% on Friday, closed 1.7 points or 0.48% higher, but well below its intraday peak after earlier rising as much as 1.2%. Germany's DAX put on 0.7%, France's CAC 0.59% and Britain's FTSE 0.52%.

“Nothing has fundamentally changed in Europe so this is really all about sentiment,” Daniel Murray, head of research at EFG Asset Management in the UK, told Bloomberg. “Markets go down one day and up the next - volatility is something investors have to get used to now. Worries about growth in China are going to be less important as the focus moves towards the [US Federal Reserve rate decision] for the next 10 days. You can make strong arguments either way about whether or not they will hike.”

Sentiment in Europe was boosted by positive US equity futures. Emini Dow futures were lately up 66 points or 0.41% after hitting triple-digit gains yesterday. Emini S&P futures were ahead 10.5 point or 0.55%.

The gains came despite further losses in China yesterday as trade resumed following a four-day market holiday. The Shanghai Composite declined 2.52% after the National Bureau of Statistics revised its 2014 annual GDP assessment down to 7.3% from an earlier figure of 7.4%. The index earlier rose as much as 1.8% following weekend assurances from the Governor of the People's Bank of China that the stock market correction had almost run its course, and an  announcement that the government is considering introducing a 'circuit-breaker' to halt trading during times of extreme market volatility. Read more here. Hong Kong's Hang Seng lost 1.23%, but Japan's Nikkei resisted the downtrend with a rise of 0.38%.

Mining stocks were among the market leaders in Europe after commodities giant Glencore announced plans to cut debt by selling assets and closing loss-making mines. London shares in the industry heavyweight jumped 7.02%. BHP rallied 1.28% and Rio Tinto 0.72% in UK trade amid hopes of reduced competition in key commodities. London copper improved 0.6%, bucking a general downtrend in metals, after Glencore revealed plans to close some African copper mines for 18 months, removing 400,000 tonnes of supply. Aluminium fell 0.5%, nickel 1.5%, tin 0.7% and zinc 0.7%. Lead edged up 0.2%. Read more here. Spot iron ore for import to China yesterday rallied $1 to US$56 a dry ton.

Energy shares capped European gains as oil took its cues from weakness in Shanghai. West Texas Intermediate crude oil for October delivery was lately down $1.80 or 3.9% at US$44.25 a barrel.

Gold logged a mild loss, hovering close to its weakest level in two and a half weeks with traders reluctant to make bets ahead of this month's too-tight-to-call Federal Reserve rate decision. Gold for December delivery was lately off $3 or 0.27% at US$1,118.40 an ounce.

The dollar was this morning buying 69.28 US cents.

TRADING THEMES TODAY

WALLOWING AND WAITING: Minimal market-moving news overnight. Europe was oversold on Friday relative to the US and therefore had room for a partial recovery last night without sending any broader message. The fact the major indices finished well below their highs suggests minimal enthusiasm for advancing without a lead from Wall Street. Any early optimism over China yesterday ended in familiar disappointment, with the Shanghai Composite closing near its intraday low despite more government attempts to talk it higher. Of perhaps greatest interest to our formerly mining-heavy market is news that commodities giant Glencore blinked overnight, announcing mine closures and a share issue. The broader implications of that move will take weeks to play out. As for today, Australian traders will keep one eye on US futures and one on Shanghai. Watch out for Chinese trade data, due sometime around lunchtime.   

ECONOMIC NEWS: August business confidence data are due at 11.30am EST. China is due to release trade figures today, exact time uncertain, but normally early afternoon. Trade resumes tonight in the US with a light diet: consumer credit, labour market conditions index and small business index.

Good luck to all.