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Stocks muted after China factory growth eases

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

Joe McDonald (The Jakarta Post)
Beijing
Mon, November 3, 2014 Published on Nov. 3, 2014 Published on 2014-11-03T17:22:45+07:00

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G

lobal stocks were mostly lower Monday after unexpected weakness in Chinese manufacturing tempered enthusiasm for Japan's surprise central bank stimulus.

KEEPING SCORE: Germany's DAX declined 0.2 percent to 9,306.30 and France's CAC-40 shed 0.1 percent to 4,228.18. Britain's FTSE 100 was up 0.2 percent at 6,557.28. 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.

ASIA'S DAY: China's benchmark Shanghai Composite Index gained 0.4 percent to 2,430.03 while Hong Kong's Hang Seng declined 0.3 percent to 23,915.57. Tokyo was closed for a holiday but the dollar was trading at a seven-year high against the yen after the Bank of Japan's announcement Friday. Seoul shed 0.6 percent to 1,952.97. Taiwan and Singapore rose while India and Sydney declined.

CHINA FACTORIES: A gauge of Chinese manufacturing released by a government-sanctioned industry group declined by 0.3 points to 50.8 on a 100-point scale on which numbers above 50 show an expansion. The market consensus had called for an increase to 51.2 points. The unexpected weakness fed concern growth in the world's second-largest economy will decline further.

JAPAN STIMULUS: Japan's central bank delighted investors with its announcement Friday it will step up bond purchases in hopes of stimulating spending in the world's third-largest economy. The Bank of Japan said it will increase its purchases by 10 trillion yen to 20 trillion yen ($91 billion to $181 billion) to about 80 trillion yen ($725 billion) a year. That boosted sentiment after the U.S. Federal Reserve's decision last week to end its stimulus through its quantitative easing strategy of massive bond purchases.

THE QUOTE: "The moves from the BOJ were huge and the fact the central bank worked in such cohesion with the government shows why being long Japanese equities is the right trade for now," said Chris Weston, chief market strategist at IG in Melbourne. "It's not often you get such a clear sign that authorities want a higher equity market to generate monetary velocity, but that's exactly what we are seeing."

ENERGY: Benchmark U.S. crude was down 46 cents to $80.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 58 cents on Friday to $80.54. Brent crude, used to price international oils, was off 45 cents at $85.41 per barrel.

CURRENCIES: The dollar rose to 112.88 yen from 112.33 yen late Friday. The euro fell to $1.2498 from $1.2524. (**)

 

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