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Europe shares up, Asia down on business surveys

TOKYO - Asian stocks fell Thursday after China's factory output grew at the slowest pace in five months while European markets gained on a survey that showed an improvement in the region's business activity.

European markets were mostly higher in morning trade. France's CAC-40 recouped earlier losses to be up 0.4 percent to 4,119.55 and Germany's DAX rose 0.5 percent to 8,983.94. But Britain's FTSE 100 lost 0.5 percent to 6,370.86. Futures indicated gains for Wall Street. Dow futures rose 0.3 percent to 16,481 and S&P 500 futures advanced 0.4 percent to 1,933.50.

A preliminary reading of China's massive manufacturing industry for October provided mixed messages. HSBC's factory purchasing managers index rose to 50.4 in October from 50.2 the previous month (figures above 50 indicate expansion) but the output sub-index slipped to a five month low. "While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand," HSBC said.

A stronger than anticipated European economic survey has raised hopes the region may avoid slipping back into recession. Financial information company Markit says its composite purchasing managers index for the 18-country eurozone, a broad gauge of business activity, rose to 52.2 points in October from 52.0 in September.

Oil prices extended losses after the U.S Energy Department reported an increase in oil inventories that was far larger than expected. Benchmark U.S. crude was down 7 cents at $80.45 a barrel in electronic trading on the New York Mercantile Exchange after falling $1.97 on Wednesday. The slide in energy prices in the past two weeks has raised doubts about the strength of the global economy but also offers some upside in Asia where many countries are reliant on imported fuel.

In Asia, Japan's Nikkei 225 closed down 0.4 percent at 15,138.96 while Hong Kong's Hang Seng fell 0.3 percent 23,333.18. Seoul's Kospi shed 0.3 percent to 1,931.65 and Australia's S&P/ASX 200 dropped less than 0.1 percent to 5,383.10. China's Shanghai Composite was down 1.0 percent at 2,302.42.

Later in the global day, major U.S. companies such as Microsoft, 3M,, Caterpillar and United Continental will be releasing earnings reports. Asian companies, including major Japanese names such as Toyota Motor Corp., are releasing their reports later in the month.

The euro rose to $1.2658 from $1.2646 late Wednesday. The dollar jumped to 107.52 yen from 107.16 yen.

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