World stocks rise on Wall Street, China optimism

YURI KAGEYAMA
June 2, 2014
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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 rose Monday after China's manufacturing activity expanded and Wall Street benchmarks hit record highs.

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. Investors mostly looked past a weaker reading in the equivalent U.S. survey.

In Europe, Germany's DAX rose 0.1 percent to close at 9,950.12 and Britain's FTSE 100 added 0.3 percent to 6,864.10. France's CAC 40 shed 0.1 percent to 4,515.89.

On Wall Street, the Dow was up 0.1 percent to 16,737.81 and the S&P 500 added almost 0.1 percent to 1,924.40, pushing further into record territory.

Investors will not much fazed by a report from the Institute of Supply Management that showed manufacturing activity slowed in May.

The equivalent index for China, by the Federation of Logistics and Purchasing, rose to its 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 were closed for holidays in mainland China, Hong Kong, Taiwan and New Zealand.

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.

Meanwhile, the European Central Bank is expected to loosen its monetary policies on Thursday. The euro fell another 0.3 percent to $1.3602 as a looser policy typically weighs on a currency.

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 down 14 cents to $102.57 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar rose 0.5 percent to 102.33 yen.