Shares rose in early European trading on Friday after retreating in Asia as the latest batch of economic data provided mixed signals on the outlook for recovery from the pandemic.
Two surveys released on Friday showed Chinese manufacturing increased in April, but growth appeared to be slowing. Figures show that the European economy contracted in the first three months of the year, while the US economy grew, growing at an annual rate of 6.4%.
Recent major coronavirus outbreaks and slow progress in vaccinations add to concerns about the outlook for economies in Asia and Europe.
France’s CAC 40 fell less than 0.1% early in the session to 6,300.06, while Germany’s DAX added 0.4% to 15,212.91. The UK FTSE 100 added 0.3% to 6,982.92. US stocks were set for a slow start, with Dow industrials’ futures down nearly 0.2% to 33,900. S&P 500 futures fell 0.2% to 4,193.12.
The contraction in the 19 countries using the euro compares to a robust rebound underway in the United States. The second consecutive quarter of declining production, following the contraction in the fourth quarter of 2021, confirms the pandemic double-dip recession in Europe. Two-quarter decline in production is a definition of recession.
Chinese manufacturing expanded in April, but growth could slow after a rebound from the coronavirus pandemic, surveys have shown.
A monthly purchasing managers’ index published by business magazine Caixin rose to 51.9 on a 100-point scale from the 11-month March low of 50.6 on a 100-point scale on which the figures greater than 50 show expanding activity.
A separate survey released by China’s statistics agency and an industry group fell 0.8 points to 51.1 but was still above the 50 point mark showing growing activity. A production sub-index fell 1.7 points to 52.2.
This suggests that “the growth momentum will wane this year,” Capital Economics’ Julians Evans-Pritchard said in a report.
Chinese manufacturing and consumer spending has rebounded above pre-pandemic levels, but the recovery is slowing. Economic growth in the first three months of 2021 slowed to 0.6% from the previous quarter.
In Asian trade, the Japanese benchmark Nikkei 225 dipped 0.8% to close at 28,812.63. South Korea’s Kospi slipped 0.8% to 3,147.86. The Australian S & P / ASX 200 fell 0.8% to 7,025.80. The Hong Kong Hang Seng lost 2.0% to 28,724.88, while the Shanghai Composite slipped 0.8% to 3,446.86.
Japan and China are heading for several public holidays known as “Golden Week” which will likely slow market activity significantly in the coming days.
The Commerce Department said on Thursday that the US economy grew at a sustained annual rate of 6.4% in the last quarter and is expected to accelerate further as more vaccinations are administered and as COVID-19 cases continue to decline. Meanwhile, the Department of Labor said the number of Americans who applied for unemployment benefits fell again last week.
In other exchanges, benchmark US crude fell 60 cents to $ 64.41 per barrel in electronic trading on the New York Mercantile Exchange. It picked up $ 1.15 to $ 65.01 a barrel on Thursday. Brent, the international standard, fell 51 cents to $ 68.05 a barrel.
In currency trading, the US dollar fell to 108.90 Japanese yen from 108.93 yen. The euro fell to $ 1.2097 from $ 1.2122.