World Stocks Rise; China Manufacturing Up
SEOUL, South Korea -- World stock markets mostly gained Wednesday after Chinese manufacturing growth picked up and Australia's economy expanded at its fastest pace in three years.
The two indicators are a break from a stream of weak economic readings from the U.S. to Japan that sent stock markets into a funk the past month as investors fretted about a slowing global recovery. But markets are likely to remain volatile ahead of U.S. jobs figures due Friday.
The rise in Chinese manufacturing growth was the first in four months, according to the state-affiliated China Federation of Logistics and Purchasing. It said its purchasing managers' index, or PMI, rose to 51.7 in August from 51.2 in July. Numbers above 50 show manufacturing activity expanding.
The rise in the index "shows that China's economy will not suffer a serious correction," the report said, citing federation analyst Zhang Liqun.In European trading, Britain's FTSE 100 rose 0.3% to 5,238.32 and France's CAC-40 gained 0.1% to 3,495.20. Germany's DAX declined 0.6% at 5,887.45. Wall Street futures were slightly higher Wednesday. Leading Asia's gains was Australia's S&P/ASX 200 index, which jumped 2.1% to 4,495.70. Investors cheered new figures showing that the nation's gross domestic product rose a seasonally adjusted 1.2% in the April-June quarter as demand from China and elsewhere in Asia boosted exports of iron ore and other commodities. In Japan, the Nikkei 225 stock average added 102.96, or 1.2%, to 8,927.02 after hitting a 16-month closing low the previous day. Elsewhere in Asia, Hong Kong's Hang Seng index rose 0.4% to 20,623.83, South Korea's Kospi advanced 1.3% to 1,764.69 and India's Sensex was up 0.7% to 18,102.61. China's manufacturing figures were better than expected and probably helped to stabilize markets, said Mark Tan, who helps manage the equivalent of about $11.1 billion of equities and bonds at UOB Asset Management in Singapore. "China drives the Asian market now rather than the U.S. market." Despite the positive number, the benchmark Shanghai index edged 0.6% lower to 2,622.88 as many mainland investors doubted the uptick means the overall slowdown in China's rapid growth has been halted. In New York on Tuesday, the Dow Jones Industrial Average edged up 4.99, or 0.05%, to close at 10,014.72. Stocks gave up most of their gains in mid-afternoon after minutes from the latest Federal Reserve meeting showed officials' increasing concern about the U.S. economy.
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