Reuters: US Dollar Report: GLOBAL MARKETS-Shares gain as China data eases growth fears

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GLOBAL MARKETS-Shares gain as China data eases growth fears Apr 2nd 2012, 07:28 By Emelia Sithole-Matarise LONDON, April 2 | Mon Apr 2, 2012 3:28am EDT LONDON, April 2 (Reuters) - European shares rose on Monday, kicking off the second quarter on a positive note after surprisingly strong China manufacturing data, though continuing signs the world's second biggest economy is slowing kept demand for riskier assets in check. European shares followed Asian equities higher after data on Sunday showed China's official Purchasing Managers' Index (PMI) , which covers large factories, jumped to an 11-month high of 53.1 in March, beating forecasts. European stocks rose 0.2 percent, nudging the MSCI world equity index up 0.1 percent. Emerging stocks added 0.3 percent. Later in the session, euro zone manufacturing data will be watched for any sign of fresh weakness after flash estimates last month painted a grim outlook for the region as it struggles to generate the growth needed to tackle its debt. European shares snapped a three-day losing run on Friday, with the pan-European FTSEurofirst 300 index ending the quarter with a gain of 6.8 percent, its best first-quarter performance since 2006, after euro zone finance ministers agreed to boost rescue funds for the currency bloc. "The Chinese economic data have reduced the fear on a 'hard landing' in China," said Roger Peeters, strategist at Close Brothers Seydler Research in Frankfurt. But some cautioned not to read too much into the stronger-than-expected figure. "I don't think the economy has improved a lot," Nomura economist Zhang Zhiwei said. "If you take out the seasonality factor, this year's jump is less than the historical average. From that perspective, it's not a very strong signal." Safe-haven government bond prices retreated, with German Bund futures down 64 ticks at 137.85 while cash German 10-year yields were up six basis points at 1.85 percent . U.S. 10-year yields were 2.5 basis points higher at 2.239 percent. The relatively upbeat Chinese data hoisted the Australian dollar more than a full U.S. cent to a peak of $1.0470 before it slid back to $1.0419. "Investors will watch PMI readings from other regional economies ... If they also improve, the story of Asia regaining momentum in Q2 would provide more lasting support for markets," said Credit Agricole CIB in a research note. Equivalent U.S. data will also be released with investors keen to see whether the recent positive momentum in the world's largest economy can be sustained. Link this Share this Digg this Email Reprints

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