Stocks turn lower after weak global economic surveys

AP News
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Posted: Apr 23, 2015 7:49 AM
Stocks turn lower after weak global economic surveys

TOKYO (AP) — Shares turned lower in European trading on Thursday, sapped by gloomy manufacturing data from the eurozone, China and Japan. Asian markets closed mostly higher, however, on hopes for economic stimulus.

KEEPING SCORE: Germany's DAX fell 1.3 percent to 11,710.91 and France's CAC 40 lost 0.9 percent to 5,164.04. Britain's FTSE 100 was flat at 7,030.32. Wall Street likewise looked set for a slow start, with Dow futures down 0.3 percent and S&P futures 0.2 percent lower.

WEAK SURVEYS: A preliminary survey of the manufacturing and services sectors in the eurozone showed activity slowed in April from March's four-year high, reflecting weaker rates of expansion for France and Germany despite accelerating growth elsewhere in the region.

HSBC bank said a preliminary version of its index based on a survey of factory purchasing managers in China fell to its lowest point in a year in April. The fresh sign that growth is faltering in the world's second biggest economy will add to pressure on policymakers to act to stave off a sharper slowdown.

A similar survey in Japan showed a third straight monthly fall in manufacturing, suggesting industries are still not in full recovery mode after the recession brought on by a sales tax hike on April 1, 2014.

EARNINGS: In corporate earnings, networks giant Ericsson was its shares slide 8 percent after reporting tough competition in North America, while drug maker Novartis said its profits rose, but sales fell due to the impact of a strong dollar.

Later, investors will look for a raft of earnings results in the U.S. from the likes of General Motors, Google, Microsoft and Starbucks.

GREECE GLOOM: An agreement with Greece's European creditors on additional reforms in exchange for rescue money due for the end of April remains far off ahead of a meeting Friday in the Latvian capital of Riga. The lack of a plan to protect Greece from defaulting and even dropping the euro is clouding prospects for its recovery.

THE QUOTE: "U.S. and European equities have been seeing some choppy trade with a bit of uncertainty around earnings data and Greece. This is unlikely to change in the near term and could be a deterrent for some investors for the time being," Stan Shamu, a market strategist for IG, said in a commentary.

ASIA'S DAY: Asian investors shrugged off fresh data showing economic weakness in China and Japan, as investors pinned their hopes on further stimulus measures. Japan's Nikkei 225 remained above the 20,000 mark it broached for the first time in 15 years the day before, gaining 0.3 percent to 20,187.65. The Shanghai Composite added 0.4 percent to 4,414.51 while Hong Kong's Hang Seng index shed early gains, falling 0.4 percent to 27,827.70. South Korea's Kospi gained 1.4 percent to 2,173.41. Australia's S&P ASX/200 edged 0.1 percent higher to 5,844.80 and markets in Southeast Asia were mixed.

ENERGY: Benchmark U.S. crude oil fell 27 cents to $55.89 a barrel in electronic trading on the New York Mercantile Exchange. It fell 45 cents to $56.16 a barrel on Wednesday.

CURRENCIES: The dollar slipped to 119.97 yen from 119.98 yen late Wednesday. The euro edged higher, to $1.0743 from $1.0725.