World stocks rise as china’s manufacturing increases
New figures released by the Chinese government show that in May, factory activity was up by the biggest margin in five months, adding to views that the country’s economy is getting back on track. The growth in the official Purchasing Managers’ Index was higher than predicted, moving to 50.8 from 50.4 in April. The figures for new orders reached its highest level since last November. Although some Asian markets were closed for holidays today, Japan closed up again, while the dollar strengthened against the yen. Other major markets including the US and Europe have seen some good starts to trading. Big news this week will include the European Central Bank’s interest rate policy meeting on Thursday and US Employment figures on Friday. Read the full story.
Eurozone manufacturing falls to six month low
Output growth fell in May, in all but one of the nations in the Eurozone. Only the Netherlands saw growth and the figures represent a 6 month low. With the European Central Bank meeting on Thursday, there is speculation that it will act to boost growth in the Eurozone, and measures may include a drop in the deposit rate to below zero. The inflation rate is also well below the 2% target, which has raised fears of deflation and the Bank is expected to address those concerns too. Read the full story.
UK manufacturing buoyant
While many of its European neighbours are showing disappointing declines in manufacturing, the UK is showing growth. For the 15th month in a row, the UK showed increased manufacturing activity and this prompted firms to take on more workers, too. Although the figures are encouraging and indicative of a broadening of the UK’s economic recovery, manufacturing accounts for only around 10% of the country’s economy. Read the full story.
Bank of India policy review
The Reserve Bank of India will announce its bi-monthly policy review tomorrow; its first since the new government took power last month. There are no major changes in policy expected, particularly on interest rates as inflation continues to be high. The rising cost of living together with increasing growth are key to India’s financial plan and, with the government’s budget due next month, analysts predict the RBI will maintain the status quo for now. Read the full story.
Frontier markets give good return for investors
They may be less well known than emerging markets, but the frontier markets have proven to be a good choice for investors, with large increases giving impressive equity returns. Markets such as Bulgaria, Nigeria and Pakistan have all seen significant growth and data suggests these small markets may be less risky than assumed. Read the full story.
China’s manufacturing figures start the week on a high... the Reserve Bank of India prepares to announce its first review since the new government took power... and why frontier markets may be a good investment