European shares reverse early losses on strong manufacturing data as US data slew begins

LONDON – European shares rebounded from early losses on Wednesday as a monthly survey showed factory output at a 10-month high in March. U.S. markets were poised for modest losses at the open after slightly weaker than anticipated U.S. jobs data.

KEEPING SCORE: In Europe, Germany’s DAX rose 0.8 per cent to 12,059 while France’s CAC-40 rose 1.1 per cent to 5,087. Britain’s FTSE 100 gained 0.7 per cent to 6,805. Wall Street isn’t expected to match Europe’s performance, with both Dow futures and the broader S&P 500 futures down 0.5 per cent.

EURO BUOYS: Financial information company said its closely monitored purchasing managers’ index — a broad gauge of business activity — for the eurozone’s manufacturing sector rose to 52.2 in March from 51.0 the previous month. Anything above 50 indicates expansion. The so-called PMI now stands at a 10-month high, the latest in a string of indicators to point to a step-change in the eurozone’s economic recovery.

ANALYST TAKE: “A weaker open in Europe this morning fooled many investors on the first day of the second quarter as indices quickly reversed course to trade significantly higher thanks to a big boost from some European PMI reports,” said Craig Erlam, senior market analyst at OANDA.

US CENTER STAGE: A busy period of U.S. economic data started on a fairly disappointing note when the ADP private payrolls firm said 189,000 new jobs were created in March. That was below market expectations for an increase of around 250,000. Though ADP’s survey doesn’t always tally with official numbers, the figures may prompt some analysts to reduce forecasts for Friday’s official data. Before then, there’s much more to digest, including the monthly manufacturing report from the Institute for Supply Management later.

DOLLAR AND FED: This week’s run of U.S. economic indicators could have a huge bearing on predictions over when the Federal Reserve will starting raising interest rates. That could have a big impact on the dollar, which has spiked sharply higher in recent months on expectations of higher U.S. borrowing rates. On Wednesday, it was trading 0.2 per cent lower at 119.84 yen while the euro traded 0.4 per cent higher at $1.0784.

ASIA’S DAY: Japan’s Nikkei 225 stock index slipped 0.9 per cent to 19,034.84 and South Korea’s Kospi lost 0.6 per cent to 2,028.45. Australia’s S&P ASX/200 fell 0.5 per cent to 5,860.80. But Hong Kong’s Hang Seng index rose 0.7 per cent to 25,074.61 and the Shanghai Composite Index added 1.7 per cent to 3,810.29 on speculation authorities will do more to ease credit.

ENERGY: Benchmark U.S. crude slipped 14 cents to $47.46 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, rose 60 cents to $55.69 a barrel in London.