Big Chinese manufacturing improvements buoy markets
AP and AFPLONDON/HONG KONG--An unexpectedly strong improvement in a Chinese manufacturing survey shored up markets Thursday despite concerns over the country's banking sector that analysts fear may prompt a tightening in monetary policy.
October 25, 2013, 12:27 am TWN
Those worries had weighed on world markets on Wednesday. But an HSBC survey showing that China's manufacturing activity was higher than expected in October supported global sentiment and prevented further losses in China's indexes.
HSBC's main index rose to a seven-month high of 50.9 points from 50.2 percent in September — anything above 50 indicates expansion. The consensus in markets was for a more modest rise to 50.4.
The PMI tracks manufacturing activity in China's factories and is a closely watched gauge of the health of the economy. The upbeat data from China followed “broad-based modest improvements” in the Chinese economy after last year's slowdown, said Qu Hongbin, a HSBC economist in Hong Kong, in a statement accompanying the figures.
“This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms,” he said.
Last week, official figures showed China's economy grew at a better than expected annual rate of 7.8 percent in the third quarter.
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 6,705 while France's CAC-40 was 0.2 percent higher at 4,269. Germany's DAX was the standout, as it has been for much of the year, with a 0.7 percent gain to 8,979 that left it well-positioned for it its first ever foray above 9,000.
The gains in Europe came despite a manufacturing survey pointing to waning growth in the eurozone. The main purchasing managers' index from financial information company Markit slipped in October to 51.5 points from September's 27-month high of 52.2.