By Josie Cox and Tommy Stubbington
European shares edged lower Monday, burdened by Chinese
industrial production growth slowing to a level last seen during
the thick of the global financial crisis nearly six years ago.
The Stoxx Europe 600 closed 0.2% lower, extending the declines
of the previous week.
China's National Bureau of Statistics said Saturday that
value-added industrial output grew by just 6.9% in August
year-over-year, down from 9.0% in July, representing the weakest
growth streak since December 2008.
BNP Paribas strategists wrote in a note that the figures
highlight more "deep-rooted problems" in the country's economy,
while Barclays economists lowered their forecast for gross domestic
product growth this year by 0.2 percentage point to 7.2%. They also
cut their third- and fourth-quarter GDP growth estimates by 0.3 and
0.4 percentage point to 7.1% and 7.0%, respectively.
The U.K.'s FTSE 100 fell less than 0.1%, and France's CAC 40 by
0.3%. Germany's DAX 30 climbed 0.1%.
Elsewhere, the market's attention Monday was already firmly
centered on Thursday's Scottish independence referendum, the
outcome of which--strategists agree--is too close to call.
Over the weekend, in last-ditch efforts to gain support, Alex
Salmond, leader of the pro-independence Scottish National Party,
and Alistair Darling, head of the pro-U.K. Better Together
campaign, made back-to-back television appearances.
"Even if Scotland votes against independence, the recent
experience has probably reminded investors that political issues
can suddenly spring from being a tail risk to center stage,"
Citigroup economist Michael Saunders wrote in a note published late
Friday.
Deutsche Bank said on Friday that a vote in favor of
independence "would go down in history as a political and economic
mistake as large as Winston Churchill's decision in 1925 to return
the pound to the Gold Standard, or the failure of the Federal
Reserve to provide sufficient liquidity to the U.S. banking system,
which we now know brought on the Great Depression in the U.S."
On Monday, the British pound, which early last week plummeted to
a 10-month low after a poll showed a razor-thin lead for those in
favor of ending the 300-year union, fell slightly against the U.S.
dollar to $1.6231.
Elsewhere in currency markets, the Russian ruble fell sharply to
a fresh all-time low of 38.436 against the greenback, weighed by
the U.S. decision on Friday to join the European Union in expanding
sanctions to target Russian Arctic and shale-oil projects and
further limit financing to state-controlled companies.
The new measures will prevent Western energy firms from
providing technology and services--other than financial
services--to five Russian energy majors' oil projects in the
Arctic, deep offshore fields and shale, the U.S. Treasury
Department said Friday.
Moscow's Micex stock exchange fell 0.3%.
"The sanctions are likely to have a negative effect on an
already weak growth outlook for Russia," Barclays economists wrote
in a note, adding that they might also weigh on the euro-area
outlook, the euro exchange rate, and even fuel expectations of more
European Central Bank stimulus action.
In commodity markets, gold was trading 0.2% higher at $1,234.00
per troy ounce. Brent crude oil was steady at $97.98 a barrel.
Write to Josie Cox at josie.cox@wsj.com and Tommy Stubbington at
tommy.stubbington@wsj.com