Stocks muted after China factory growth eases


AP

BEIJING — Global stocks were mostly lower Monday after unexpected weakness in Chinese manufacturing tempered enthusiasm for Japan’s surprise central bank stimulus.

European stocks weakened at the start of trading on Monday, shedding some of last week’s bumper gains, with London’s FTSE 100 index losing 0.18 percent to 6,534.66 points. Elsewhere, Frankfurt’s DAX 30 slipped 0.22 percent to 9,305.73 points and in Paris the CAC-40 handed back 0.17 percent to 4,255.81. Wall Street looked set for declines following a record-high close Friday. Futures for both the Dow Jones industrial average and the Standard & Poor’s 500 were off 0.1 percent.

Asian markets were mixed Monday. Sydney eased 0.36 percent, or 19.7 points, to 5,506.9, while Seoul dropped 0.58 percent, or 11.46 points, to close at 1,952.97. Hong Kong stocks shed 0.34 percent Monday on profit-taking after last week’s gains and following another batch of disappointing Chinese manufacturing data. The Hang Seng Index slipped 82.09 points to 23,915.97 on turnover of HK$64.27 billion (US$8.29 billion). Hong Kong surged in line with global markets Friday after Japan’s central bank said it would widen its asset-purchasing scheme to boost lending and try to avoid a recession. However, dealers took their cash off the table Monday, and selling was accentuated by official data at the weekend showing Chinese manufacturing activity slowed in October. The country’s purchasing managers’ index (PMI) came in at 50.8, the National Bureau of Statistics said, lower than 51.1 in September. Readings above 50 indicate growth while anything below points to contraction. On Monday a separate report by HSBC came in a 50.4, the strongest result since July. Tokyo was shut for a public holiday. Global markets and the dollar surged on Friday after the Bank of Japan said it would widen its asset-purchasing scheme to boost lending and try to avoid a recession. China at the weekend released an index of manufacturing activity that showed growth slowed in October, the latest data indicating the world’s second-largest economy slowing down. The official purchasing managers’ index (PMI) came in at 50.8 last month, the National Bureau of Statistics said, lower than 51.1 in September. Readings above 50 indicate growth while anything below points to contraction. PMI tracks activity in China’s factories and workshops and is a closely watched indicator of the health of the economy. On Monday a separate report by HSBC came in a 50.4, the strongest result since July. ��Overall, the manufacturing sector continued to stabilise in October, however the sequential momentum likely weakened,�� said HSBC. ��The economy still shows clear signs of insufficient effective demand.�� The figures have raised hopes that Beijing will introduce new economy-boosting measures, with some analysts suggesting officials will cut the amount of cash banks must keep in reserve in order to boosting lending. ��More new infrastructure projects and continuous monetary easing might improve manufacturing for the coming months,�� Haitong Securities said, according to Dow Jones Newswires. The price of gold fell to US$1,172.85 an ounce from US$1,173.87 late Friday.