World stocks rise as China manufacturing improves

YURI KAGEYAMA
Associated Press
View photos
Men check their mobile phone in front of the electronic board of a securities firm in Tokyo, Monday, June 2, 2014 . Share prices rose cautiously in Asia on Monday, after the Dow Jones index closed last week at a record high and market players waited for a U.S. jobs report later in the week for confirmation of such optimism about the American economy. The Nikkei, the benchmark for the Tokyo Stock Exchange, was trading at 14,827.39, gaining 1.3 percent in the first hour of trading. (AP Photo/Koji Sasahara)

TOKYO (AP) — World stock markets mostly rose Monday after China's manufacturing expanded and two Wall Street benchmarks hit record highs.

Gains in Europe were mild and trading in Asia was relatively subdued, with markets closed for holidays in mainland China, Hong Kong, Taiwan and New Zealand.

But sentiment was underpinned by an official survey that showed China's manufacturing expanded for a third month in May, with overall factory activity at its highest level this year. New closing highs for the Dow and S&P 500 on Friday also helped.

As trading got underway in Europe, Germany's DAX rose 0.2 percent to 9,960.78 and Britain's FTSE 100 added 0.3 percent to 6,862.77. France's CAC 40 shed 0.2 percent to 4,512.35.

Futures augured further gains on Wall Street. Dow futures gained 0.1 percent to 16,722 and S&P 500 futures were up less than 0.1 percent at 1,922.30.

The China Federation of Logistics and Purchasing said Sunday that its monthly manufacturing index rose to 50.8 points in May on a 100-point scale on which numbers above 50 show activity expanding. That was up from April's 50.4 and was the highest level this year, suggesting a slowdown in the world's second-largest economy is stabilizing.

Japan's Nikkei 225 closed up 2.1 percent at 14,935.92 after the yen weakened to about 102 to the dollar. Weakness in the yen is typically a boost for the share prices of Japan's export giants.

South Korea's Kospi inched up 0.4 percent to 2,002 and Australia's S&P/ASX 200 added 0.5 percent to 5,518.50. Markets in Southeast Asia were mostly higher.

Traders and investors are watching for two events later this week, including the May U.S. jobs report to be released Friday.

Economists expect the U.S. economy created 220,000 jobs in May, and the unemployment rate fell to 6.3 percent, according to FactSet, a financial information provider.

The European Central Bank will have its interest rate policy meeting Thursday, although the impact on markets might not be great as expectations for monetary easing are already factored in.

Koji Takeuchi, a senior economist at Mizuho Research Institute in Tokyo, said investors are also anticipating the announcement of Japanese government policies later this month that are expected to include corporate tax cuts, a possible boon for Japanese companies and the economy.

"The growth strategies are going to have a positive impact," he said. The Nikkei bottomed out at about 14,000 points in May and is now heading to the 15,000 level, he said.

In energy markets, benchmark U.S. oil for July delivery was up 35 cents to $103.06 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close at $102.71 on Friday.

The euro fell to $1.3597 from $1.3634 late Friday. The dollar rose to 102.03 yen from 101.80 yen.