Reuters (24/10) - A pick-up in Chinese factory activity sparked a
recovery in world shares on Thursday, though signs of sluggish growth in
Europe capped gains and dragged the euro off a two-year peak against
the dollar.With expectations that the U.S. Federal Reserve will
maintain its stimulus program unchanged into next year still dominating
markets, the fresh round of Purchasing Managers' Indexes reminded
investors that the global economy is slowly gaining momentum.Activity
in China's vast factory sector reached a seven-month high this month,
according to an HSBC survey, easing concerns about a slowdown in Chinese
exports which would point to weakening global demand.The data
helped lift Europe's broad FTSEurofirst 300 index 0.3 percent by midday,
supporting mining and industrial stocks with investors also seeking out
auto companies which would benefit from a pick-up in Chinese demand.U.S.
shares were expected to open higher, though factory activity data for
the world's biggest economy due later is likely to show a slight
slowdown over a period when the government went into partial shutdown. Overall,
MSCI's world equity index added 0.1 percent, slightly retracing losses
of 0.6 percent on Wednesday, when markets were rocked by fears that a
spike in Chinese short-term rates could hurt growth.DOLLAR DOLDRUMSThe
dollar remained broadly weaker as U.S. Treasuries yields traded near
their lowest levels in three months after this week's soft payrolls
persuaded many investors the Fed will not pare its bond purchases until
2014.Dollar selling briefly lifted the euro to $1.3824, its
strongest since November 2011, though analysts said there was little
conviction behind the move.The euro was last steady at $1.3772
while 10-year German bond yields were flat at 1.77 percent, showing
little reaction to the PMI numbers.Markit's PMI index for the
17-nation euro area showed business activity eased slightly in October
after a pick-up in September, though it confirmed that region's economic
recovery was taking root.
