Investing.com -- Mining stocks were a rare bright spot in generally weak stock markets in Asia and Europe Monday, as traders priced in the risk that the world could be left short of iron ore if Brazil's authorities crack down on mining giant Vale (NYSE:VALE).
Markets were otherwise broadly on hold ahead of key economic and political events - notably the Federal Reserve's policy-making meeting - due later this week. The STOXX 600 was down 0.4% at 356.48 at 06:05 AM ET (11:05 GMT).
Vale's biggest rivals, Rio Tinto (LON:RIO), BHP Billiton (LON:BHPB) and Anglo American (LON:AAL) all outperformed local markets in Australia and the U.K. Monday on speculation they would profit from higher prices if Vale's production plans are disrupted.
The world’s largest iron ore producer, Vale is the operator of a tailings dam in the Brazilian state of Minas Gerais that burst last week, leaving at least 58 dead and hundreds more missing. Over the weekend, Standard & Poor's put its credit rating on review for a downgrade, while the Brazilian authorities froze $3 billion of its assets to cover potential penalties.
Vale’s ADRs in New York lost 8.1% on Friday and are set to open down another 7.5% on Monday.
Earlier, there was more gloom about the state of the global economy after research institute Ifo reported Germany’s exporters have sharply cut their expectations for 2019. It said the key auto, chemicals and engineering sectors were all downbeat about their prospects. Bayer (DE:BAYGN) fell 1.2%, while Volkswagen (DE:VOWG_p) and Daimler (DE:DAIGn), the maker of Mercedes-Benz, were down 0.6% and 0.4%, respectively.
Luxury goods makers Kering (PA:PRTP) and LVMH (PA:LVMH) were also among the biggest losers in Europe on nervousness for Chinese demand ahead of key trade talks between the Chinese and U.S. governments on Wednesday. Gucci owner Kering was also suffering after weekend reports that it faces a $1.6 billion tax bill in Italy.