World stock markets uneven after weak China data

Traders are pictured at their desks at the Frankfurt stock exchange on May 21, 2015.

REUTERS

TOKYO - World stock markets were lackluster Thursday after China's economy showed new signs of weakness but the Shanghai benchmark surged on hopes for more government stimulus.

After a mostly down day in Asia, European benchmarks were largely in the red. France's CAC 40 shed 0.4 percent to 5,112.55 and Germany's DAX dropped 0.6 percent to 11,774.01. Britain's FTSE 100 was little changed at 7,006.80. Wall Street was poised for a lower opening: Dow futures were down slightly and S&P 500 futures shed 0.1 percent.

Manufacturing in China shrank for the third straight month in May as demand remained soft, raising the chances of more stimulus to prop up growth in the world's No. 2 economy. HSBC's preliminary manufacturing index, based on a monthly survey of purchasing managers, came in at 49.1. That's slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.

The minutes of the U.S. Federal Reserve's meeting from April showed that policymakers at the central bank generally thought June was too early to raise rates. That was not a surprise and the minutes didn't provide any hint about how long the bank would wait after June before hiking its policy rate for the first time since the global financial crisis.

Japan's Nikkei 225 was barely changed at 20,202.87 while Hong Kong's Hang Seng shed 0.2 percent to 27,523.72. South's Korea Kospi dropped 0.8 percent to 2,122.81. Benchmarks in Singapore, India and Taiwan also fell. China's Shanghai Composite jumped 1.9 percent to 4,529.42 as the weak data reinforced hopes for more government measures to boost the economy; the index is up about 125 percent over the past year. Australia's S&P/ASX 200 rose 0.9 percent to 5,662.30.

"Trade is choppy but positive. I don't like fighting momentum which is still to the upside. However, I have not seen this sort of trading indifference in markets for several years," IG market strategist Evan Lucas said in a commentary. "I am hyper-vigilant currently as there are several global and fundamental factors that could cause markets to topple over in the middle of the calendar year."

Bank of Japan policymakers started a two-day monetary policy meeting that will wrap up Friday. It's unlikely the central bank will alter its already lavishly easy monetary stance. Some economists advocate an expansion of BOJ's monetary stimulus but stronger-than-expected growth for the first quarter suggests policymakers will stay their current course for now.

Benchmark U.S. crude was up 27 cents at $59.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 99 cents to close at $58.98 a barrel in Nymex floor trading on Wednesday. Brent crude, a benchmark for international oils, was up 24 cents at $65.29 a barrel in London.

The dollar fell to 120.99 yen from 121.25 yen. The euro rose to $1.1146 from $1.1094.