LONDON -- Markets were choppy Wednesday amid ongoing concerns over the Chinese economy and signs that the U.S. recovery may be losing some steam.
For much of the early part of this year, markets have been roiled by worries over emerging markets in light of the U.S. Federal Reserve's moves to reduce its monetary stimulus. The stimulus in its various guises had helped shore up markets in the developing world but a recent U.S. economic soft patch that may be related to bad weather has raised expectations that the Fed may slow down the so-called "tapering" of its stimulus.
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Though tensions in emerging markets appear to have abated somewhat, investor fears over China, the world's number 2 economy, have accentuated following some disappointing economic data. In particular, investors have grown worried over a credit bubble in the country and what the Chinese monetary authorities may do to combat it. One outcome of this has been a marked fall in the value of the country's currency, the yuan, against the dollar.
"There does however appear to be a general sense of relief over the fact that he headwinds we've seen from emerging markets of late do appear to be abating, although there's clearly a degree of concern over the state of the Chinese economy," said Joao Monteiro, analyst at Monex Capital Markets.
After a subdued trading session in Asia, stocks in Europe have drifted lower. The FTSE 100 index of leading British shares was down 0.3 percent at 6,811 while Germany's DAX fell the same rate to 9,675. The CAC-40 in France was 0.4 percent lower at 4,398.
Wall Street was poised for a subdued opening with both Dow futures and the broader S&P 500 futures 0.2 percent higher. Gains of that order would merely make up for Tuesday's retreat when U.S. stocks drifted lower after slightly disappointing consumer confidence and housing data.
"Despite the drip, drip, drip effect of negative U.S. economic data U.S. markets continue to remain fairly resilient, with only a fairly nominal negative finish last night," said Michael Hewson, chief market analyst at CMC Markets.
With a dearth of scheduled news later, the dollar was also subdued, with the euro steady at $1.3737.
Earlier in Asia, Japan's Nikkei 225 stock average closed down 0.5 percent at 14,970.97 and Hong Kong's Hang Seng gained 0.5 percent to 22,437.44.