LONDON/SYDNEY: Share markets fell slightly on Monday as investors braced for a data-packed week culminating in a US jobs report that could decide whether a rate cut expected this month will be regular or super-sized. Survey data released on Saturday showed Chinese manufacturing activity sank to a six-month low in August, and data on Monday showed eurozone factories are also still struggling.

Europe’s STOXX 600 index fell 0.21 percent, after hitting a record high on Friday. Germany’s DAX and Britain’s FTSE 100 were down 0.1 percent and 0.2 percent respectively. “European equities have opened on a weaker footing owing to weaker economic data from China,” said Aneeka Gupta, equity strategist at WisdomTree. “The industrials and consumer discretionary sector led the declines.”

The dollar index, which tracks the currency against six peers, was down very slightly at 101.68 after hitting a two-week high overnight. The US currency climbed 0.55 percent against the yen to 146.96.

“We are seeing some natural caution at the beginning of a critical month for markets, with the Fed set to start its interest rate cutting cycle,” said Ben Laidler, head of equity strategy at Bradesco BBI. “Markets made a dramatic recovery from the early August flash sell-off but now face seasonally by far the weakest performance month of the year.” Chinese stocks lost 1.7 percent, led by losses in real estate after a survey showed home prices growth had slowed. Shares of New World Development, a major Hong Kong property developer, dived 14 percent after it estimated a net loss. Futures for the US S&P 500 index were down 0.1 percent, while those for the tech-laden Nasdaq 100 were flat. US stock markets were closed for Labor Day on Monday and Treasuries were untraded.

“We’re always a bit cautious when we’re trading at all time highs and when earnings expectations continue to be fairly lofty in the US in particular,” said said Carl Hammer, head of asset allocation at lender SEB. The big event of the week will be the US non-farm payrolls report on Friday, which is expected to show the economy added 165,000 jobs in August, up from 114,000 in July.

Traders currently think a September Federal Reserve rate cut is nailed on and see a 33 percent chance that it could be an outsized 50-basis point reduction, but that could shift on Friday. The weak July jobs report helped spark a sell-off in global stocks at the start of August, although the S&P 500 has since rebounded to sit 0.4 percent off a record high.

Investor sentiment was jolted by worries over China’s economy after a report showed activity in the country’s manufacturing sector contracted for a fourth consecutive month in August and more than expected. The weekend data “rang alarm bells”, noted Joshua Mahony, chief market analyst at trading group Scope Markets. China’s manufacturing “sector clearly remains in a troublesome position as the country attempts to navigate its way out of the recent real estate fuelled slowdown”, he added. In August, the Purchasing Managers’ Index (PMI) -- a key barometer of industrial output—stood at 49.1 points, the National Bureau of Statistics announced. This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books. – Agencies