GLOBAL MARKETS-Metals sink on China, Europe growth concerns as U.S. dollar firms

(Updates prices, adds comment)
By Marius Zaharia
LONDON, July 24 (Reuters) - Metal prices hit multi-year lows
on Friday as weaker-than-expected data from China and the euro
zone raised concerns about global growth, but the U.S. dollar
rose on the prospects of a Federal Reserve interest rate hike.
Copper CMCU3 fell to its lowest level since 2009 after a
survey showed Chinese manufacturing contracted by the most in 15
months in July as orders shrank. Worries grew over demand in the
world's biggest metals consumer with stockpiles mounting up.
The flash Caixin/Markit China Manufacturing Purchasing
Managers' Index (PMI) contracted for the fifth straight month,
and faster than economists polled by Reuters had estimated.
ID:nL3N1032YR
Euro zone business activity also started the second half on
a less secure footing than expected, hit by Greece's
near-bankruptcy. Markit's flash PMI fell to 53.7 this month from
June's four-year high of 54.2. A Reuters poll had predicted a
more modest dip to 54.0.
While economies looked weaker in Europe and Asia,
better-than-expected U.S. jobless claims kept the Federal
Reserve on track for a rate increase in coming months.
The U.S. dollar was 0.4 percent higher against a basket of
currencies, trading at 97.489 .DXY . U.S. stock futures ESc1
pointed to a slightly higher open on the Wall Street.
"What a conundrum we face: Commodities are shouting that the
global economy is deteriorating, key emerging markets are
already seeing major volatility, and yet the world's most
important central bank is close to tightening monetary policy,"
Michael Every, head of financial market research for Asia at
Rabobank.
In a busy day for corporate updates on Friday, BASF
BASFn.DE , the world's largest chemicals firm by sales,
slightly missed expectations with a 2 percent rise in operating
profit, with profits of French food group Danone DANO.PA also
falling short of expectations.
British telecom firm Vodafone VOD.L rose 3.7 percent after
results that showed improvements across major markets in Germany
and Britain. ID:nL5N1040T6 French defence group Thales
TCFP.PA was up 8 percent, hitting an all-time high after its
results. ID:nL5N1034YV
The pan-European FTSEurofirst 300 .FTEU3 hit a one-week
low early in the day , but quickly rebounded to trade 0.2
percent higher at 1582.22. Euro zone bond yields fell. GVD/EUR
"Historically the ECB (European Central Bank) has said it
would do whatever it takes to save the euro, it has launched
quantitative easing to support the euro zone and investors have
faith that they will continue to be supportive if there are
signs of weakness," said Alastair McCaig, market analyst at IG.
The Australian dollar, often used as a liquid proxy for
China trades, hit a six-year trough of $0.7269 AUD=D4 . Slowing
Chinese growth means less demand for commodities such as iron
ore, one of Australia's chief exports. The recent decline in a
wide range of commodities, including oil, has weighed on
currencies like the Canadian and Australian dollars.
London CMNI3 and Shanghai nickel SZNcv1 contracts both
fell 1.3-1.5 percent.
China looks set to further reduce interest rates and the
amount of cash its banks must hold as reserves to try to keep
its economy growing at 7 percent this year, which would be the
slowest pace in a quarter of a century, a Reuters poll showed on
Thursday. ID:nL3N1013QG
The euro dipped fell 0.3 percent to 1.0944 EUR= after the
European data, still well above last week's 3-month low of
$1.0808.
Gold XAU= slid more than 1 percent to its lowest since
early 2010 on Friday, on course for its biggest weekly loss in
nine months. GOL/
Oil prices neared four-month lows. Brent crude LCOc1 was
down 35 cents at $54.92 a barrel, having hit an intraday low of
$54.80, its lowest since early April. U.S. crude for September
delivery CLc1 rose 12 cents to $48.57 a barrel. O/R
Brent has lost nearly 13 percent in July, its largest
one-month fall since a near 19 percent loss in January.