World stocks ascend as China manufacturing index increases
World stocks rose Thursday after a mainland Chinese manufacturing index improved and buying appetite strengthened after substantial falls in stock prices in the past quarter.
Germany’s DAX rose 0.9 percent to 9,747.25 and France’s CAC-40 gained 1.4 percent to 4,516.12. Britain’s FTSE 100 climbed 1.3 percent to 6,136.84. Futures pointed to more gains on Wall Street after Wednesday’s rebound. Dow futures added 0.8 percent to 16,294 and S&P 500 futures rose 0.7 percent to 1,922.80.
In Asia, Japan’s Nikkei 225 jumped 1.9 percent to 17,722.42 as the yen weakened against the U.S. dollar, giving a boost to exporter stocks. Markets in Hong Kong and mainland China were closed for holidays. South Korea’s Kospi rose 0.8 percent to 1,979.32 and Australia’s S&P/ASX 200 advanced 1.8 percent to 5,112.10. Markets in Southeast Asia were mostly higher.
An official manufacturing index based on a survey of factory purchasing managers edged up to 49.8 in September from August’s 49.7, which was the lowest level since August 2012. Numbers below 50 indicate contraction. A separate manufacturing index compiled by financial magazine Caixin and Markit fell to 47.2 in September from 47.3 in August. But the figure was better than the preliminary result of 47.0 released on Sept. 23. China’s economic growth held steady at 7 percent in the latest quarter ending in June, which was the weakest performance since the 2008 global crisis.
The Bank of Japan’s “tankan” business confidence survey provided mixed messages about the Japanese economy. Sentiment of major manufacturers fell though remained modestly positive overall. Other indicators, such as prospects for profits and plans for construction spending, were positive, providing some hope for an economy struggling to rise out of two decades of stagnation and deflation.
“There has been a growing feeling in the markets that while the global outlook has dimmed somewhat, the current virulence of the sell-off was somewhat overdone,” said Angus Nicholson, market analyst at IG in Singapore in a report. “It would be easy to be overly cynical about the Chinese (manufacturing indexes) today. They were still objectively weak and one could still beat up the data or accuse the Chinese government of making it up. Nonetheless, the massive selloff seen in global equities since the start of August was driven by two key factors: concerns about the China slowdown and nervousness about the September Fed meeting.”