China (BBN)-European and Asian stocks rose as investors weighed whether policy makers will add stimulus amid manufacturing data from China to Germany.
The dollar held gains versus the euro while oil and copper fell.
The Stoxx Europe 600 Index added 0.2 percent by 8:01 a.m. in London as the MSCI Asia Pacific Index (MXAP) advanced 0.2 percent.
China’s benchmark stock index increased to a one-week high. Standard & Poor’s 500 Index futures were little changed after the gauge reached a record August 29, with U.S. markets closed today for the Labor Day holiday.
The greenback touched the strongest level in almost a year versus the euro. Crude slid 0.3 percent in New York and copper dropped 0.5 percent on the London Metal Exchange.
Bets policy makers will continue to support their economies underpinned the biggest monthly gain since February in global stocks, while the dollar advanced and a bond rally sent yields tumbling.
Factory output is in focus today, with an official Chinese gauge falling for the first time since February, as some central banks meet on policy this week.
European Union governments vowed at the weekend to impose more sanctions on Russia should the conflict with Ukraine worsen.
“The market seems to be treating bad news as good news,” said Nader Naeimi, who helps oversee about $131 billion as Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd. “China may introduce more stimulus as economic data weakens. What’s happening in Ukraine is unfortunate but the damage to the global economy will likely be minimal.”
CHINESE FACTORIES
The purchasing managers’ index from the China Federation of Logistics and Purchasing dropped to 51.1 for August. Economists surveyed by Bloomberg projected a decline to 51.2, from 51.7 in July.
The final reading of HSBC Holdings Plc and Markit Economics’ China manufacturing PMI fell to 50.2, below the 50.3 forecast by economists. A level above 50 signals expansion in the sector.
The reports follow weaker-than-expected credit, production and investment data for July, suggesting the Chinese economy is losing momentum.
A pullback in manufacturing, coming as the property market slumps, adds pressure on the government to boost stimulus.
The Shanghai Composite Index climbed 0.8 percent while Hong Kong’s Hang Seng Index added 0.2 percent.
China’s benchmark money-market rate fell the most in two months as funds that were tied up by initial public offerings last week flowed back into banks.
ECONOMIC DATA
Markets in Malaysia and Vietnam are closed for holidays. In Europe, Germany and the U.K. are among countries that will also release updates on the factory sector, and the Markit euro-zone PMI is also scheduled.
A separate report from Germany showed exports rose 0.9 percent in the second quarter from the first three months of the year, exceeding economists’ projection for a 0.2 percent increase.
Imports jumped 1.6 percent, compared with an estimate of 0.5 percent growth. Gross domestic product in Europe’s largest economy shrank 0.2 percent in the second quarter, the Federal Statistics Office said, confirming an Aug. 14 estimate.
PMI READINGS
Almost twice as many stocks rose for each that fell on the Stoxx Europe 600 Index.
Novartis AG climbed the most since March after saying its experimental heart drug showed better results than standard therapy.
Iliad SA declined 1.8 percent after people familiar with the matter said it’s talking to private-equity firms to make an improved offer for T-Mobile US Inc.
Japan’s Topix rose for the first time in three days, after declining 0.9 percent in August, while India’s BSE Sensex index jumped 0.8 percent.
The HSBC and Markit Economics manufacturing purchasing managers’ index for India fell to 52.4 last month from 53 in July.
The final reading of the Markit/JMMA Japan manufacturing PMI came in at 52.2 for August, the highest reading since March.
The Bank of Japan reviews monetary policy Sept. 4. Taiwan’s August factory index expanded for a 12th month to the strongest since April 2011 while a gauge for Indonesian manufacturing fell to the lowest since August 2013.
GLOBAL GAINS
The MSCI Asia Pacific Index fell 0.6 percent in August, after three months of gains, as stocks in Japan and Hong Kong retreated.
MSCI’s All-Country World Index climbed 2 percent last month, the most since a 4.7 percent increase in February. The value of global equities touched a record $66 trillion in August, data compiled by Bloomberg show. The global stock gauge was little changed today.
The dollar was at 1.3135 against the euro, near the strongest since September last year. It dropped 0.8 percent last week in the longest stretch of weekly declines since December 1999.
Investors are scrutinizing data out of the euro zone after European Central Bank President Mario Draghi signaled at a Federal Reserve symposium in Jackson Hole, Wyoming last month he may expand stimulus to ward off deflation.
CENTRAL BANKS
The ECB meets Sept. 4, with economists surveyed by Bloomberg predicting no change to the area’s three main interest rates.
The deposit rate was pushed to negative in June amid an unprecedented stimulus package that included targeted long-term loans for banks.
West Texas Intermediate crude for October delivery slid as much as 0.4 percent in electronic trading on the New York Mercantile Exchange. Copper in London dropped to $6,945 a metric ton.
Russia, the world’s biggest energy exporter, may have its energy and finance industries targeted by the European Union, with the bloc’s leaders tasking the European Commission at the weekend to come up with proposals for more sanctions.
Pro-Russia rebels attacked two Ukrainian coast-guard vessels, as fighting between separatists and military forces in the country’s southeast continued.
BBN/ANS-01Sept14-3:00pm (BST)