Disappointing China Exports Halt Stocks, Hammer Commodities

Relief that Crimea remained largely calm over the weekend helped European shares recover 0.2 percent after Friday's sharp sell-off, though the poor Chinese export numbers and general global uncertainty provided a subdued backdrop.

Merger activity in France spurred the CAC 40 .FCHI but mining firms sensitive to China's appetite for raw materials weighed on Britain's FTSE 100 .FTSE and German firms' exposure to Russia saw the Dax .GDAXI underperform again. .EU

"People sold on Friday on fear of an escalation in Crimea, but things seem to have stabilized now so it's tempting to buy the dip," said David Thebault, head of quantitative sales trading at Global Equities in Paris.

Investors in Asia started the new week on a cautious note as China's exports unexpectedly tumbled 18 percent year-on-year in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy.

The soft data put a damper on risk sentiment, which had been boosted briefly by Friday's stronger-than-expected U.S. non-farm payrolls report that had provided a welcome respite from a run of disappointing data.

China's CSI300 share index .CSI300 plunged 3.3 percent on Monday to its lowest level in nearly nine months; copper, of which China is a major consumer, hit a four-year low in Shanghai, while the commodity-sensitive Australian and Canadian dollars also suffered.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS posted its biggest fall in over a month as it lost 1.4 percent. Tokyo's Nikkei stock average .N225 shed 1 percent, as disappointing Japanese GDP data compounded the woes.

UKRAINE

Russian forces tightened their grip on Crimea over the weekend, seizing another border post and a military airfield, ahead of a planned Moscow-backed referendum on Sunday on whether the Black Sea peninsula should join Russia.

But diplomatic efforts to cool the crisis continued to calm markets as all sides expressed unease but a general desire to prevent the tensions from escalating.

The Chinese trade data weighed on currency markets.

The Chinese yuan opened down 0.5 percent and Chinese short-term rates fell amid speculation Beijing is quietly easing monetary policy to buttress wobbly economic growth.

The Australian and Canadian dollars, which are highly sensitive to China's appetite for their raw materials, lost as much as half a percent against a broadly steady U.S. dollar.

.DXY.

"The Chinese export numbers are the main driver this morning - you can see that the Aussie and Canadian dollars are both under pressure," said Alvin Tan, strategist with French bank Societe Generale in London.

The euro, in contrast, stayed within striking distance of Friday's 2-1/2 year high peak at $1.3875, touched after the European Central Bank suggested last week that the euro zone recovery was on track with no need for an extra policy push for now. That has pushed rate cut bets back.

COPPER SUFFERS

Gold edged lower for a second straight session on Monday after the strong U.S. jobs data on Friday eased fears of an economic slowdown and dimmed the metal's safe-haven appeal.

However, the crisis in Ukraine was likely to remain a key theme for the precious metal. Data from the Commodity Futures Trading showed that hedge funds and money managers raised their bullish bets in gold futures and options for a fourth consecutive week as geopolitical tensions boosted speculative interest to its highest in more than a year.

The Chinese data helped send Brent and U.S. crude down 84 cents and $1.25 to $108.15 and $101.31 a barrel respectively, ending two straight days of gains. Geopolitical tensions in Ukraine and Libya capped the falls.

"The ongoing situation in Ukraine will put a high floor on oil prices and lead to more volatility," said Victor Shum, vice president of energy consultancy IHS Energy Insight.

The drop in China's exports pushed three-month copper on the London Metal Exchange down 1.7 percent to $6,663.75 a metric ton (7345.5 tons). It earlier slid as far as $6,608 a ton, its weakest since June 25, when it stopped at $6,602, the lowest since July 2010.

(Additional reporting by Blaise Robinson in Paris, Patrick Graham in London and Shinichi Saoshiro in Tokyo; Editing by Susan Fenton)