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Global stocks down after muted China manufacturing

KUALA LUMPUR/HONG KONG -- Muted Chinese manufacturing weighed on global stock markets Monday as investors awaited the release of U.S. data that might provide clearer signs about when the Federal Reserve will cut its monetary stimulus.

As trading got underway in Europe, Britain's FTSE 100 fell 0.4 percent to 6,624.84 and France's CAC-40 eased 0.2 percent to 4,286. Germany's DAX was flat at 9,408.23. Wall Street futures pointed to lackluster trading after fizzling Friday at the end of a holiday-shortened session. S&P 500 futures were almost unchanged and Dow futures were up 0.1 percent.

Markets appeared to be winding down ahead of year-end holidays but a slew of U.S. data this week on manufacturing, home sales, jobs report and a third quarter GDP revision could provide final clues on when the Fed will cut, or taper, its US$85 billion of monthly bond purchases, Credit Agricole CIB in Hong Kong said in a market commentary.

The Fed's next policy meeting is on Dec. 17-18.

The Fed's stimulus has kept interest rates low to support economic recovery in the U.S. but also propelled money into higher yielding stocks. Frequent shifts in expectations about when the stimulus will be withdrawn have been key driver of markets in the past few months and could decide how they end the year. Most economists think the Fed will maintain the stimulus until early next year, rather than start reducing it in December.

In Asia, markets mostly fell on Monday, with Tokyo hit by profit-taking, while Shanghai tumbled on expectations China will restart initial public offerings in the new year, raising fears of a share glut. Investors seemed broadly unmoved by upbeat figures showing Chinese manufacturing continuing to expand in November.

Tokyo ended flat, edging down 6.80 points, to 15,655.07, a second successive loss after hitting a near six-year high on Thursday. Sydney fell 0.76 percent, or 40.5 points, to 5,279.5, its lowest close in seven weeks and Seoul lost 0.69 percent, or 14.09 percent, to end at 2,030,78.

Shanghai lost 0.59 percent, or 13.13 points, to 2,207.37 but Hong Kong was up 0.66 percent, adding 157.26 points to 24,038.55, its highest since April 2011.

HSBC said Monday that its index of manufacturing activity in China came in above forecasts for November, providing hope that the recent pick-up in the economy can be sustained.

The banking giant said its China purchasing managers' index (PMI) sat at 50.8 last month, which while down from 50.9 in October is much better than the 50.4 initially estimated on November 21. The data comes a day after China's own official index came in at 51.4 for November, unchanged from October. It was up from 51.1 in September and the highest since reaching 53.3 in April 2012.

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