AP Business Writer
MUMBAI, India (AP) – Stock markets rose Thursday on hopes that more help for the global economy is on the way, after minutes from the U.S. Federal Reserve showed policy makers favor further stimulus and poor manufacturing data out of China fueled speculation that Beijing will take more action to boost its economy.
European markets rose in early trading as Greek prime minister Antonis Samaras continued his diplomatic offensive to convince European leaders to give him more time to turn around his debt-strapped economy. Investors will be watching for data on European manufacturing out Thursday to gauge if their optimism is misplaced.
Britain’s FTSE 100 rose 0.3 percent to 5,789.45. Germany’s DAX rose 0.2 percent to 7,030.45. France’s CAC 40 rose 0.2 percent to 3,468.63. U.S. stocks were poised to rise as well. Dow futures were up 0.2 percent to 13,178 while the broader S&P 500 futures rose 0.1 percent to 1,414.30.
Investors were cheered by the release of minutes from the last major meeting of the Fed, which showed members of its Open Market Committee favoring additional action to help the still-weak U.S. economy, unless substantial strengthening occurs.
Elsewhere, a preliminary reading of Chinese manufacturing activity indicated that government stimulus efforts have not been able to neutralize global headwinds. The HSBC Flash China manufacturing purchasing managers index fell to a nine-month low of 47.8 in July, as weak global demand hit Chinese export orders, HSBC said Thursday. New export orders fell at their fastest rate in three years.
Markets took the news with equanimity. Investors also shrugged off news of Quantas Airways’ first annual loss since it was privatized in 1995. Australia’s flagship carrier blamed rising fuel prices, labor unrest and international competition for the 245 million Australian dollar ($257 million) annual loss in profits Thursday and said it would cancel an $8.5 billion order for 35 new Boeing planes.
Hong Kong’s Hang Seng index led gains with a 1.2 percent rise, to 20,132.24, while mainland China’s Shanghai Composite Index rose 0.3, to 2,113.07. South Korea’s Kospi added 0.4 percent to 1,942.54. Australia’s S&P/ASX 200 added 0.2 percent to 4383.70. Japan’s Nikkei 225 index was up 0.5 percent, at 9,178.12.
“People are hoping, hoping and hoping,” said Andrew Holland, chief of investment advisory at Ambit Capital in Mumbai. “Any kind of bad news from China just means they’re going to do some kind of easing.”
But those hopes are fragile, he cautioned, as China, the EU and the U.S. are all limited in what they can do to further boost their economies.
Housing prices in many Chinese cities have started to rise again, complicating stimulus efforts, he said.
“Come September if nothing has moved, I think we’re going to get a lot more volatility,” he said. “We’ve talked about easing, whether it’s China, Europe, India reforms, or the Fed. You buy on the rumor, sell on the news.”
The timing of a Chinese stimulus is also not clear. Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong, said in a Thursday note that policymakers are likely to wait until after the 18th Party Congress, scheduled for October, to take major action.
“Then the new leadership can be credited for creating a turnaround, thus cementing the people’s support,” he said. That would also give Chinese policymakers time to see what Europe and the U.S. do first, potentially leveraging their actions, he said.
In currencies, the prospect of the U.S. pumping more dollars into the economy pushed the greenback to its lowest level against the euro since early July. The euro rose to $1.2550 from $1.2530 late Wednesday in New York. The dollar rose to 78.52 yen from 78.44 yen.
Benchmark oil for October delivery rose 80 cents to $98.05 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 42 cents to finish Wednesday at $97.26 per barrel.
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