Stock markets uneven on China data

AP and AFP

TOKYO/HONG KONG–World stock markets were lackluster Thursday after mainland China’s economy showed new signs of weakness but the Shanghai benchmark surged on hopes for more government stimulus.

After a mostly down day in Asia, European benchmarks were largely in the red. France’s CAC-40 shed 0.4 percent to 5,112.55 and Germany’s DAX dropped 0.6 percent to 11,774.01. The UK’s FTSE 100 was little changed at 7,006.80. Futures pointed to losses on Wall Street. Dow futures were down 0.2 percent at 18,219. S&P 500 futures shed 0.3 percent to 2,117.10.

The minutes of the U.S. Federal Reserve’s meeting from April showed that policymakers at the central bank generally thought June was too early to raise rates. That was not a surprise and the minutes didn’t provide any hint about how long the bank would wait after June before hiking its policy rate for the first time since the global financial crisis.

Shanghai advanced after another tepid reading on Chinese manufacturing activity that will likely raise hopes for fresh monetary easing, while Tokyo edged up to a new 15-year high. Shanghai rallied 1.87 percent, or 83.13 points, to 4,529.42. Sydney added 0.93 percent, or 52.0 points, to 5,662.3. Tokyo stocks ended flat, adding only 0.03 percent but hitting new 15-year highs.The Nikkei 225 index at the Tokyo Stock Exchange added 6.31 points to 20,202.87, while the Topix index of all first-section shares climbed 0.21 percent, or 3.40 points, to 1,646.80. The headline index surged after the opening bell, as a weak yen cheered investors, and amid a mood of general optimism for the future health of Japan Inc. In share trading, Japan’s biggest bank Mitsubishi UFJ rose 0.9 percent to 906.8 yen, Toyota added 0.21 percent to 8,423 yen and Tokyo Electric Power soared 6.74 percent to 586 yen. Seoul fell 0.78 percent, or 16.73 points, to close at 2,122.81 and Hong Kong eased 0.22 percent, or 61.33 points, to close at 27,523.72. A preliminary reading of HSBC’s purchasing managers’ index (PMI) for China showed activity picked up in May, but continued to shrink, despite Beijing’s efforts to kick-start the sluggish economy, including three interest rate cuts since November. The index registered 49.1 this month, a two-month high but still below the 50 mark that separates contraction from growth. It was at 48.9 in April. ��It remains extremely hard if not impossible for any revival to be sustained,�� Wang Tao, chief China economist at UBS Group AG in Hong Kong, wrote in a report before the data release. ��Further policy support is still needed to stabilize China’s growth momentum and arrest the passive tightening of monetary conditions,�� Wang said, according to Bloomberg News. Gold fetched US$1,209.50 compared with US$1,208.82 late Wednesday.