Shares rose in early European trading on Friday after pulling back in Asia as recent economic data provided mixed signals on the prospect of a recovery from the pandemic.
Two polls released on Friday showed that China’s manufacturing sector expanded in April, but growth appeared to be slowing. The figures show that the European economy contracted in the first three months of the year, while the US economy advanced at an annual growth rate of 6.4%. The recent major coronavirus outbreaks and slow progress in vaccination are adding to concerns about the outlook for economies in Asia and Europe.
France’s CAC 40 fell less than 0.1% to 6,300.06 in early trading, while the German DAX rose 0.4% to 15,212.91. The UK’s FTSE 100 gained 0.3% to 6,982.92. US stocks were set for a slow start with the future for Dow industrials falling nearly 0.2% to 33,900. S&P 500 futures fell 0.2% to 4,193.12.
The decline in the 19 countries that use the euro currency is akin to a robust recovery in the US. The second quarter in a row with falling production after a decline in the fourth quarter of 2021 confirms the recession of the European double pandemic. Two quarters of falling production is a definition of a recession.
Chinese production expanded in April, but growth could slow after a recovery from the coronavirus pandemic, polls showed. A monthly purchasing managers index, published by business magazine Caixin, rose to 51.9 on a 100-point scale from an 11-month low of 50.6 on a 100-point scale, where numbers over 50 indicate increasing activity.
A separate poll released by China’s statistics bureau and an industry group fell 0.8 points to 51.1 but was still above the 50 point mark and showed that activity was picking up. A production sub-index fell 1.7 points to 52.2.
This suggests that “growth momentum will weaken this year,” Capital Economics’ Julians Evans-Pritchard said in a report. Chinese manufacturing and consumer spending have rebounded above pre-pandemic levels, but the recovery is slowing. Economic growth in the first three months of 2021 slowed compared to the previous quarter to 0.6%.
In Asian trading, Japan’s benchmark Nikkei 225 fell 0.8% to 28,812.63. South Korea’s Kospi fell 0.8% to 3,147.86. The Australian S & P / ASX 200 fell 0.8% to 7,025.80. Hong Kong’s Hang Seng lost 2.0% to 28,724.88, while the Shanghai Composite fell 0.8% to 3,446.86. Japan and China are facing several public holidays known as “Golden Week” that are likely to slow market activity significantly in the coming days.
The Commerce Department said Thursday that the U.S. economy grew swiftly at 6.4% a year in the most recent quarter and is expected to accelerate further as more vaccinations are given and COVID-19 cases continue to decline. Meanwhile, the Department of Labor said the number of Americans seeking unemployment benefits fell again last week.
In other trades, the US crude oil price in electronic trading on the New York Mercantile Exchange fell 60 cents to $ 64.41 a barrel. On Thursday it rose by $ 1.15 to $ 65.01 a barrel. Brent crude, the international standard, lost 51 cents to $ 68.05 a barrel. In forex trading, the US dollar fell from 108.93 yen to 108.90 Japanese yen. The euro fell from $ 1.2122 to $ 1.2097.