Policy: Economy

Global stocks rise after US manufacturing survey

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News,Business,China,Economy,Japan,Asia,Financial Markets

LONDON (AP) — Global stock markets rose Tuesday as the Federal Reserve vowed to keep interest rates low and a survey showed an improvement in U.S. manufacturing activity.

In Europe, Germany's DAX rose 0.5 percent to close at 9,603.71 while France's CAC-40 added 0.8 percent to 4,426.72 despite figures showing the eurozone's unemployment rate remained stuck at a near-record 11.9 percent. Britain's FTSE 100 added 0.8 percent to 6,652.61.

On Wall Street, the S&P 500 rose 0.3 percent to 1,877.56 while the Dow gained 0.3 percent to 16,498.15.

Markets had been buoyed since the day before, when Fed chief Janet Yellen said U.S. interest rates would stay low for some time to support the economy.

On Tuesday, sentiment was further bolstered by the ISM report on manufacturing, which showed activity in the sector grew at a faster clip in March.

Earlier, in Asia, markets largely shrugged off two surveys that showed weakness in China's manufacturing.

A factory purchasing managers' index released by the China Federation of Logistics & Purchasing ticked up to 50.3 in March from 50.2 in February. Economists said the increase should have been bigger as factories ramped up after the Lunar New Year holiday in February.

Separately, HSBC's manufacturing index fell to 48.0 from 48.5, slightly worse than a preliminary report and its third consecutive monthly drop. Both indexes use a 100-point scale on which numbers above 50 indicate expansion.

HSBC said its reading implies that first quarter economic growth likely fell below the 7.5 percent rate that China's leaders have targeted for the full year.

Hong Kong's Hang Seng added 1.3 percent to 22,338.54 and China's Shanghai Composite rose 0.7 percent to 2,047.46.

Japan's Nikkei 225 was the underperformer, falling 0.2 percent at 14,791.99. Japan's sales tax rose Tuesday to 8 percent from 5 percent, a change needed to help stabilize government finances but also a possible setback for consumer demand and economic recovery. Separately, the central bank's quarterly business survey showed muted confidence that could affect spending and investment plans.

Elsewhere, Seoul's Kospi gained 0.3 percent and Australia's S&P/ASX 200 fell 0.1 percent.

In currencies, the euro rose 0.3 percent to $1.3806 and the dollar rose 0.2 percent to 103.48 yen.

Benchmark U.S. crude for May delivery was down $1.49 at $100.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents to $101.58 on Monday.

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Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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