European shares reverse early losses
European shares rebounded from early losses on Wednesday as a monthly survey showed factory output at a 10-month high in March, helped by strong growth in new business. Asian markets were lackluster after weak data from China and Japan.
Germany’s DAX rose 0.4 percent to 12,012.18 and the United Kingdoms’s FTSE 100 gained 0.5 percent to 6,805.65. France’s CAC-40 advanced 0.6 percent to 5,064.22. Wall Street appeared poised for a weak start, however, with S&P 500 futures 0.5 percent lower at 2,050.60.
A survey of manufacturers in countries using the euro found the strongest improvement in business conditions in 10 months. Markit’s purchasing managers index was at 52.2, compared with 51.0 in March. Readings above 50.0 imply expansion.
“Producers are benefiting from the weaker euro,” Chris Williamson, Markit’s chief economist, wrote in a commentary. “New orders are consequently showing the best growth for nearly a year.”
Asian Markets Mostly Slip, Shanghai Up on China Data
Asian markets mostly retreated Wednesday following losses on Wall Street, with Tokyo also hurt by a disappointing reading of Japanese business confidence.
But Hong Kong and Shanghai climbed on figures showing a rebound in Chinese manufacturing activity.
After a strong performance for global equities this year, analysts have warned of a rocky road ahead in the near term, with Greece’s debt crisis still unresolved, volatility in oil prices and uncertainty over U.S. interest rates.
Tokyo tumbled 0.90 percent, or 172.15 points, to finish at 19,034.84, Seoul closed 0.62 percent lower, giving back 12.58 points to end at 2,028.45 and Sydney fell 0.52 percent or 30.71 points to 5,860.8.
However, Shanghai surged 1.66 percent, or 62.39 points, to 3,810.29 — its highest close since March 17, 2008. And Hong Kong added 0.73 percent, or 181.86 points, to 25,082.75.
After an impressive three months that saw big gains in some markets — including a 10 percent rise in Tokyo and 8 percent in Sydney — investors took to the sidelines Wednesday as they keep track of various global events.
“This is going to be a tougher quarter and you can expect higher volatility,” Nader Naeimi, Sydneybased head of dynamic asset allocation at AMP Capital Investors, told Bloomberg News.
Close attention is being paid to Greece, where the anti-austerity government is trying to hammer out new terms for its multi-billion-U.S.dollar bailout.
However, it is struggling to come up with proposals that will satisfy its creditors, chiefly paymaster Germany, and release much-needed cash to help it avoid a default and a likely exit from the eurozone.
In New York Tuesday the Dow sank 1.11 percent, the S&P 500 fell 0.88 percent and the Nasdaq dropped 0.94 percent.
Adding to uncertainty on Wednesday was Japan’s closely watched Tankan survey of business confidence, which came in below expectations, highlighting the fragility in the world’s number three economy.
The survey of more than 10,000 companies — marking the difference between the percentage of firms that are optimistic and those that see conditions as unfavorable — is the most comprehensive indicator of how Japan Inc. is faring.
“The Tankan showed that firms, particularly manufacturers, are now acutely aware that overseas demand is softening,” said a report by SMBC Nikko Securities.
Gold fetched US$1,183.55 against US$1,183.06 late Tuesday. In other markets: — Wellington was flat, edging up 1.60 points to 5,835.58.
— Manila closed 0.51 percent higher, adding 40.56 points to 7,981.05.
— Kuala Lumpur dropped 0.24 percent, or 4.47 points, to close at 1,826.31.
— Jakarta fell 0.94 percent, or 51.81 points, to 5,466.87.
— Singapore closed 3,447.02.
— Bangkok rose 1.30 percent, or 19.64 points, to 1,525.58.
— Mumbai rose 1.08 percent, or 302.65 points, to 28,260.14.