World markets rise on solid euro area manufacturing optimism

Early jitters in Europe were eased by a survey showing that the manufacturing sector in the 16 countries that use the euro expanded in October for the first time in a year and a half.

The monthly purchasing managers index — a broad gauge of business activity — for the euro area rose to 50.7 from September’s 49.3. Any reading above 50 indicates that the sector is growing.

A similarly encouraging picture emerged with equivalent British data. The PMI for October spiked to 53.7 from 49.9 in September. October’s reading represented the fastest pace of growth since November 2007.

Though the manufacturing data helped stem the selling pressure in the markets that arose after Asia’s big retreat in the wake of Friday’s losses on Wall Street,investors will be looking to see if an equivalent survey from the Institute for Supply Management is equally rosy. “With Wall Street eyeing a positive start,the onus will be on the likes of the US ISM manufacturing data to impress this afternoon if we’re to avoid another turn around in sentiment,” said Anthony Grech,market strategist at IG Index.

At the moment,there are hopes that the data will not disappoint and that US stocks will claw back some of the losses recorded on Friday when investors were spooked by government figures showing US personal spending in September fell 0.5 per cent from the previous month. Dow futures were up 58 points,or 0.6 per cent,at 9,722 while the broader Standard & Poor’s 500 futures rose 6.6 points,or 0.6 per cent,to 1,039.60.

The week will end with the closely-watched US nonfarm payrolls report for October,which often sets the stock market tone for a week or two.

With several big economic events ahead,Keith Bowman,an equities strategist at Hargreaves Lansdown in London,reckons that it could well end up being an “exceptionally volatile” week in stock markets. Earlier,Japan’s key Nikkei 225 stock average led Asian declines,down 231.79,or 2.3 per cent,at 9,802.95. Hong Kong’s Hang Seng index lost 132.68,or 0.6 per cent,to 21,620.19 while Australia’s S&P/ASX 200 was down 2.2 per cent. South Korea’s market dropped 1.4 per cent.

Benchmarks in New Zealand,Taiwan and Singapore also fell,though the region recovered some early losses on strength in mainland China. The Shanghai Composite index was the only major market in positive territory,up 2.7 per cent on stronger manufacturing figures and higher bank earnings.

India manufacturing growth slows in Oct

MUMBAI: India’s manufacturing activity expanded for the seventh consecutive month in October,but at a slightly slower pace as growth in new orders and output slowed,a survey showed. The HSBC Markit Purchasing Managers’ Index (PMI),based on a survey of 500 companies,fell to 54.5 in October from 55 in September. A reading above 50 means activity expanded during the month. Growth in domestic new orders may be beginning to suffer from the impact of a drought,but stronger foreign demand was helping to cushion the blow,HSBC senior Asian economist Robert Prior-Wandesforde said. “The PMI,which led the upturn in the industrial cycle,has gone essentially nowhere over the last six months,” he said. Reuters