Chinese, European growth signs support stocks-A A +A
Tuesday, September 3, 2013
LONDON -- Evidence of a rebound in manufacturing activity in China and Europe helped global stock markets rise Monday. However, Wall Street's closure for Labor Day kept trading volumes light.
The possibility of a US military strike against Syria in retaliation for alleged chemical weapons use against civilians continued to overhang markets but the initial concern has abated. UK lawmakers voted against involvement and President Barack Obama decided to seek approval from Congress.
In Britain, the Financial Times Stock Exchange (FTSE) 100 stock index added 1.5 percent to close at 6,506.19. Most of gain was from the cellphone company Vodafone which said it was with in talks with Verizon to sell its US mobile business.
The confirmation of the $130 billion deal came after trading in London had finished for the day, but Vodafone's shares closed up 3.4 percent at 2.13 pounds on expectations of the purchase.
Meanwhile, Germany's Deutsche Aktienindex (DAX) index ended the day up 1.74 percent to 8,243.87 while France's stock market (CAC-40) was up 1.84 percent to 4,006.01. Italian and Spanish stocks were also up after surveys showed manufacturing activity rose in the two countries, which are in recession and have been focal points of Europe's debt crisis.
Earlier, global sentiment was also boosted by two surveys that showed China's manufacturing sector improved last month after prolonged weakness.
The Hongkong and Shanghai Banking Corporation (HSBC) purchasing managers' index rose to 50.1 points in August, a level that indicates expansion as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years.
Meanwhile, the official China Federation of Logistics and Purchasing's Purchasing Managers Index (PMI) rose to 51.0 from July's 50.3, which was the highest level and biggest increase this year.
Both indexes use a 100-point scale on which numbers below 50 indicate a contraction.
The signs of improvement in China's massive manufacturing industry encourages news for its overseas suppliers as Chinese leaders try to reverse a slowdown that's pulled economic growth to a two-decade low of 7.5 percent in the latest quarter.
Japan's Nikkei 225 stock average gained 1.4 percent to close at 13,572.92. Hong Kong's Hang Seng jumped 2 percent to 22,175.34. Australia's S&P/ASX 200 index climbed 1 percent to 5,188.30.
Meanwhile, benchmarks in South Korea, Indonesia and the Philippines fell.
Last week, markets had been buffeted by weak US economic data. The US government reported Friday that Americans' income and spending both increased just 0.1 percent in July. The scant rise suggested that economic growth was off to a weak start in the second half of the year. It followed other reports showing steep drops in new-home sales and orders for long-lasting manufactured goods in July.
Benchmark crude for October delivery was down $1.08 at $106.57, a barrel in electronic trading on the New York Mercantile Exchange as fears of military strikes on Syria continued to fade. The contract fell $1.15 on Friday.
In currencies, the euro dipped to $1.3190 from $1.3202, while the dollar rose to 99.35 yen from 98.19 yen. (AP)