World stock markets slipped yesterday on signs the Chinese and European economies were cooling, while Japan’s yen slid to a seven-year low against the dollar on expectations of more Japanese stimulus.
Wall Street prices rose as US data on factory activity in the mid-Atlantic region and the housing market offset worries about global demand. But the troubling data on the global economy fuelled price gains in US government debt.
The MSCI index of world stocks was flat, while a gauge of European stocks provisionally closed down 0.3 per cent.
The data from purchasing managers indexes showing “slowing growth in China and the eurozone helped put risk appetite on the back foot,” said strategist Gennadiy Goldberg at TD Securities in New York.
The China flash HSBC/Markit manufacturing purchasing managers’ index showed factory output contracted in the world’s second-biggest economy for the first time in six months. .
In Europe, signs were equally gloomy. The private sector in Germany grew at its slowest pace in 16 months, and in France a slight pick-up was overshadowed by the fastest drop in new orders in more than a year.
With the data adding pressures on the European Central Bank as it ponders possible asset-buying schemes, eurozone government bond yields fell and the euro fell for the first time in three days. The yield on Germany’s 10-year Bund fell to 0.8 per cent.
The yen hit a seven-year low against the dollar and slid to a six-year low against the euro despite the weak eurozone data. The euro last traded at $1.2520, off an overnight three-week high of $1.2602.
The yen last traded at 118.22 to the dollar.
Wall Street’s Dow Jones industrial average rose 5.4 points, or 0.03 per cent, to 17,691.13, the S&P 500 gained 4.09 points, or 0.2 per cent, to 2,052.81, and the Nasdaq Composite added 22.12 points, or 0.47 per cent, to 4,697.84.
Data from the Philadelphia Federal Reserve Bank showed that factory activity in the US mid-Atlantic region grew at its fastest pace in two decades, while industry data showed US home resales jumped to their highest in more than a year in October. And a gauge of future US economic activity gained more than expected last month.
US Treasury debt prices rose as many investors sought safety in government bonds. Benchmark 10-year US Treasury notes were up 2/32 in price to yield 2.34 per cent from 2.36 per cent late Wednesday.
Brent oil rallied ahead of what is shaping up to be a landmark OPpecmeeting next week. It was last at $78.76 a barrel, up 67 cents. US crude was up 33 cents at $74.91.