BEIJING (AP) — Global stock markets rose yesterday after Chinese factory activity improved ahead of a possible United States (US) tariff hike on Chinese imports.
London and Frankfurt advanced in early trading while Shanghai, Tokyo and Hong Kong closed higher. Monthly surveys showed Chinese manufacturing output rose in November, defying expectations of a decline.
That helped to buoy sentiment as investors wait for a US-Chinese trade deal ahead of a December 15 deadline for a tariff hike. US legislation on Hong Kong threatens to disrupt the negotiations.
The uptick in Chinese activity “has triggered some optimism,” said Vishnu Varathan of Mizuho Bank in a report.
However, “caution may be the flavour of the month” until investors see what happens with US tariffs, said Varathan.
London’s FTSE 100 was up 0.5 per cent at 7,385.82 and Germany’s DAX gained 0.6 per cent to 13,315.31. France’s CAC 40 added 0.6 per cent to 3,940.39.
On Wall Street, futures for the benchmark Standard & Poor’s 500 and Dow Jones Industrial Average were up 0.4 per cent.
On Friday, the S&P 500 dropped 0.4 per cent but ended the week up after hitting all-time highs three times. The Dow fell 0.4 per cent and the Nasdaq Composite Index slide 0.5 per cent.
In Asia, Shanghai Composite Index closed up less than one point at 2,872.61 and Tokyo’s Nikkei 225 added one per cent to 23,529.50. Hong Kong’s Hang Seng gained 0.4 per cent to 26,444.72.
Seoul’s Kospi advanced 0.2 per cent to 2,091.92 and Sydney’s S&P-ASX 200 was 0.2 per cent higher at 6,862.30. India’s Sensex shed 14 points to 40,777.89.
New Zealand declined while Taiwan declined. Southeast Asian markets were mixed.
Surveys by an official Chinese trade group and a major business magazine showed unexpectedly strong factory activity.
Caixin magazine said its purchasing managers’ index rose to a two-year high of 51.8 from October’s 51.7 on a 100-point scale on which numbers above 50 show activity expanding.
A separate survey by the China Federation for Logistics & Purchasing rose to 50.2 from 49.3.
The return to expansionary territory “strengthened the case for a short-term growth stabilisation,” said Citigroup economists in a report.
Investors have grown cautious about lack of results from US-Chinese talks on terms of the “Phase 1” deal announced by President Donald Trump in October amid negotiations aimed at ending a costly tariff war.
Washington is due to raise tariffs on USD160 billion worth of Chinese products, including smartphones and laptops, as of December 15.
Trump expressed concern negotiations might be affected by legislation he signed last week.
Investors worry the measure “at least complicates the negotiations even if an eventual deal is not derailed,” said Mizuho’s Varathan.
Elsewhere, South Korea reported November exports fell for a 12th month in November, contracting 14.3 per cent from a year earlier due to weak global demand and the US-Chinese tariff war.
Benchmark US crude rose 97 cents to USD56.14 per barrel in electronic trading on the New York Mercantile Exchange.
It lost USD2.94 the previous session to USD55.17. Brent crude, used to price international oils, rose 90 cents to USD61.39 per barrel in London.
It fell USD2.78 the previous session to USD60.49.
The dollar gained to JPY109.69 from Friday’s JPY109.48 yen.
The euro slipped to USD1.1017 from USD1.1019.