World stocks rise as US manufacturing improves


BANGKOK (AP) — World stock markets rose Wednesday, emboldened by a burst of manufacturing growth in the U.S. and data suggesting China was likely to avoid an abrupt economic slowdown.

U.S. manufacturing expanded last month at its strongest pace since June, the Institute for Supply Management reported. Orders, hiring and production all rose, while a measure of manufacturing employment reached a nine-month high.

That news came on top of a similar report out of China, the world's No. 2 economy. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index rose 0.2 percentage points to 53.3 percent in April, up from March's 53.1 and February's 51.0. A reading above 50 signifies expansion.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said a good U.S. earnings season and an improving outlook in China were helping to boost stock markets.

"I think there is emerging confidence that we can look for a relatively benign — or soft landing — to growth in China," he said.

Still, optimism was tempered after the release Wednesday of a separate survey showing that Chinese manufacturing contracted in April for the sixth straight month, though the rate of deterioration had slowed.

Adjusted for seasonal conditions, HSBC's purchasing managers index, or PMI, for April was 49.3, up from 48.3 in April. The index has remained below 50 — the level indicating expansion, since October.

Britain's FTSE 100 slipped 0.2 percent to 5,802.84, but elsewhere in Europe, stocks were moving higher. Germany's DAX rose 0.8 percent to 6,814.38 and France's CAC-40 added 1.2 percent to 3,250.08.

Wall Street was headed to a flat opening, with Dow Jones industrial futures marginally down at 13,214. S&P 500 futures were flat at 1,200.30.

Earlier in Asia, Japan's Nikkei 225 rose 0.7 percent to close at 9,380.25 after a sharp tumble the day before. Hong Kong's Hang Seng gained 1 percent to 21,309.08. Australia's S&P/ASX 200 edged up 0.1 percent to 4,435.90.

Mainland Chinese shares advanced after authorities said that China's two stock exchanges would cut fees charged for trading yuan-denominated shares by 25 percent from June 1.

The benchmark Shanghai Composite Index gained 1.8 percent to 2,438.44 and the Shenzhen Composite Index gained 1.7 percent. Shares in coal and nonferrous metals led the gains.

Among individual stocks, one of Australia's largest banks, ANZ Banking Group, fell 0.8 percent despite posting a 10 percent increase in its first half profit after warning margins in its Australian business were declining.

Hong Kong-listed GOME Electrical Appliances Holdings, China's second-biggest electrical appliance retailer, plummeted 11.4 percent. That was an aftershock from a company statement Monday warning of a significant decline in first quarter profit due to a drop in sales revenue and losses in its e-commerce business.

Among mainland Chinese shares, Peoplecn Co., the online portal of the Communist Party's newspaper People's Daily, hit the upward daily limit of 10 percent on its second trading day.

Benchmark oil for June delivery was down 34 cents to $105.82 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.29 to finish at $106.16 per barrel in New York.

In currencies, the euro fell to $1.3175 from $1.3228 late Tuesday in New York. The dollar rose to 80.30 yen from 80.21 yen.


AP researcher Fu Ting contributed from Shanghai.