Chinese economic growth signs support stocks
AP and AFPLONDON/HONG KONG -- Evidence that China's economic slowdown is leveling off helped global stock markets rise on Monday, though Wall Street's closure for Labor Day was expected to keep trading volumes light.
September 3, 2013, 12:05 am TWN
Global shares and currencies were hammered last week as dealers bet on a targeted strike, which they feared would spark a wider regional conflict. The possibility of a U.S. military strike against Syria in retaliation for alleged chemical weapons use against civilians continued to overhang markets but the initial concern has abated. U.K. lawmakers voted against involvement and U.S. President Barack Obama decided to seek approval from Congress.
Germany's DAX index was up 1.6 percent to 8,231.75 while France's CAC-40 advanced the same rate to 3,996.99. Britain's FTSE 100 added 1.4 percent to 6,505.64, with shares in Vodafone up 4.5 percent on expectations it is due to close a deal to sell its U.S. mobile phone business to Verizon.
Global sentiment was boosted by two surveys that showed China's manufacturing improved last month after prolonged weakness.
The 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. The official China Federation of Logistics and Purchasing 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 are encouraging 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.
The news provided some much-needed support for regional markets after last month's major sell-off — particularly among emerging markets — caused by fears the U.S. Federal Reserve will soon start to wind down its stimulus program.
China however lowered its figure for economic growth for last year to 7.7 percent from 7.8 Monday evening, an unexpected downgrade that came after markets had closed.