Global stocks push higher on China factory data

LONDON: Global equity markets mostly rose yesterday after forecast-beating Chinese factory data raised hopes for the world’s number two economy. The London stock market hit a new record high as the pound dipped on a shock new opinion poll ahead of next week’s June 8 general election.

China said yesterday that its purchasing managers’ index of manufacturing activity held up in May, beating expectations for a decline. The reading indicated the sector continues to grow and suggests the economy is feeling the benefits of a pick-up in global demand.

China’s growth slowed to its weakest level in a quarter of a century in 2016. It is expected to ease this year as leaders try to address huge debt piles and switch from trade and investment to consumer demand as the driver of expansion. “More compelling economic data came out of China, the manufacturing sector expanded more than expected in May, and provided much comfort to investors about the health of the second biggest economy in the world,” noted analyst Naeem Aslam at trading firm Think Markets.

Shanghai, which was closed Monday and Tuesday for a holiday, ended up 0.2 percent, Sydney added 0.1 percent and Seoul was 0.2 percent higher. Singapore put on 0.2 percent and Jakarta gained 0.2 percent. However, Tokyo ended 0.1 percent lower and Hong Kong shed 0.2 percent after a one-day break. Across the Atlantic, Wall Street opened higher, with the Dow Jones Industrial Average up 0.1 percent, ahead of Friday’s release of closely watched US jobs data, which is used as a guide for the Federal Reserve’s plans for interest rate rises.

Weak pound lifts London

Meanwhile, British Prime Minister Theresa May was fighting yesterday to shore up her election campaign after a shock projection by pollsters YouGov forecast a hung parliament in which the Conservatives would fall short of a majority. “The FTSE is trading in the green... as the continued uncertainty surrounding next week’s snap election is dragging the pound sharply lower,” said IG analyst Joshua Mahony.

“Recent polls have clearly been moving in favor of often maligned Jeremy Corbyn, with the latest YouGov survey pointing towards a distinct chance that we could see the Tories fail to maintain an outright majority.” Sterling rose in recent weeks on the prospect that May would win a landslide in the June 8 poll, giving her a stronger hand in Brexit talks. However, the currency has fallen with the government’s poll numbers on fears Britain could end up with a bad EU exit deal.

France’s CAC 40 rose 0.4 percent to 5,319 while Germany’s DAX gained 0.5 percent at 12,659. Britain’s FTSE 100 rose 0.5 percent to 7,561. US shares were set to rise, with Dow and S&P 500 futures both up 0.1 percent. An ongoing probe into Russia’s meddling in the 2016 election has set off uncertainty about the administration of President Donald Trump. National Security Adviser Michael

Flynn has decided to provide documents to the Senate intelligence committee, while Trump’s personal attorney, Michael Cohen, has rejected a House intelligence committee request for information. Former White House staffer Boris Epshteyn confirmed he has been contacted for information as part of the investigation.

An official monthly survey showed that growth in China’s factory activity was steady last month in a sign that the recovery in the world’s No 2 economy is holding up. The purchasing’ managers index, or PMI, released yesterday came in at 51.2 for May.

“This suggests further stabilization of the world’s second largest economy and will allow policy makers more room to carry out the de-leverage campaign in an attempt to reduce the country’s heightened debts,” Margaret Yang Yan, analyst with CMC Markets Singapore, said of the China data.

British race

The pound was volatile after polls and surveys suggested the general election of June 8 might be closer than many had expected. Prime Minister Theresa May’s Conservative party had been expected to win by a landslide but recent polls have shed doubt on that. Investors are worried that a smaller majority could weaken the government’s ability to negotiate a good Brexit deal with the European Union. The currency fell below $1.2800 yesterday before recovering slightly to trade down 0.2 percent on the day, at $1.2836. Japan’s benchmark Nikkei 225 fell 0.1 percent to finish at 19,650.57. Australia’s S&P/ASX 200 added 0.1 percent to 5,724.60. South Korea’s Kospi gained 0.2 percent to 2,347.38. Hong Kong’s Hang Seng inched down 0.1 percent to 25,667.10, while the Shanghai Composite was up 0.2 percent at 3,117.18. Benchmark US crude lost 99 cents to $48.67 a barrel in New York. It lost 14 cents on Tuesday. Brent crude, the international standard, fell $1.22 to $50.62 a barrel in London.