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VOL. 37 | NO. 35 | Friday, August 30, 2013
Chinese growth signs support stocks
LONDON (AP) — Evidence that China's economic slowdown is leveling off helped global stock markets rise on Monday, though Wall Street's closure for Labor Day was expected to keep trading volumes light.
The possibility of a U.S. military strike against Syria in retaliation for alleged chemical weapons use against civilians continued to overhang markets but the initial concern has abated. U.K. lawmakers voted against involvement and President Barack Obama decided to seek approval from Congress.
Germany's DAX index was up 1.6 percent to 8,231.75 while France's CAC-40 advanced the same rate to 3,996.99. Britain's FTSE 100 added 1.4 percent to 6,505.64, with shares in Vodafone up 4.5 percent on expectations it is due to close a deal to sell its U.S. mobile phone business to Verizon.
Global sentiment was boosted by two surveys that showed China's manufacturing improved last month after prolonged weakness.
The HSBC purchasing managers' index rose to 50.1 points in August, a level that indicates expansion as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years. The official China Federation of Logistics and Purchasing PMI rose to 51.0 from July's 50.3, which was the highest level and biggest increase this year.
Both indexes use a 100-point scale on which numbers below 50 indicate a contraction.
The signs of improvement in China's massive manufacturing industry are encouraging news for its overseas suppliers as Chinese leaders try to reverse a slowdown that's pulled economic growth to a two-decade low of 7.5 percent in the latest quarter.
Japan's Nikkei 225 stock average gained 1.4 percent to close at 13,572.92. Hong Kong's Hang Seng jumped 2 percent to 22,175.34. Australia's S&P/ASX 200 climbed 1 percent to 5,188.30. Benchmarks in South Korea, Indonesia and the Philippines fell.
Last week, markets had been buffeted by weak U.S. economic data. The U.S. government reported Friday that Americans' income and spending both increased just 0.1 percent in July. The scant rise suggested that economic growth was off to a weak start in the second half of the year. It followed other reports showing steep drops in new-home sales and orders for long-lasting manufactured goods in July.
Benchmark crude for October delivery was down $2 at $106.80 a barrel in electronic trading on the New York Mercantile Exchange as fears of military strikes on Syria continued to fade. The contract fell $1.15 to close at $107.65 on Friday.
In currencies, the euro rose to $1.3220 from $1.3202. The dollar rose to 99.27 yen from 98.19 yen.