While you were sleeping: US manufacturing brightens

Manufacturing data from the US was better than expected, as were those from Europe, but China’s data offered another sign that growth in the world’s second-largest economy is dimming.

In the US, the Institute for Supply Management’s index of national factory activity gained to 50.9 in June from 49 in May. A reading above 50 signals expansion.

In late afternoon trading in New York, the Dow Jones Industrial Average advanced 0.65 percent, the Standard & Poor’s 500 Index increased 0.70 percent and the Nasdaq Composite Index rose 0.96 percent.

“People saw ISM was stronger and slightly higher than consensus and decided to run with it,” Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters.

A gauge of manufacturing in the euro zone rose to 48.8 last month, the highest level in 16 months, from 48.3 in May, Markit Economics said. That compared with an earlier flash estimate of 48.7.

“Eurozone manufacturing is showing welcome signs of stabilising,” Chris Williamson, chief economist at Markit, said in a statement. “Both output and new orders barely fell during June, and on this trajectory a return to growth for the sector is on the cards for the third quarter.”

Europe’s benchmark Stoxx 600 Index ended the session with a 1.2 percent gain from the previous close. Germany’s DAX rose 0.3 percent, France’s CAC 40 increased 0.8 percent and the UK’s FTSE 100 climbed 1.5 percent.

Japan offered some positive news. The country’s quarterly Tankan index for large manufacturers rose to plus 4 in June from minus 8 in March, according to a central bank report. It was the first positive number in almost two years.

Over in China, however, an official purchasing managers’ index of factory output slid to a four-month low of 50.1 last month, from 50.8, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Meanwhile, a private PMI from HSBC Holdings and Markit dropped to 48.2 in June, from 49.2 in May.

“Falling orders and rising inventories added pressure to Chinese manufacturers in June,” Hongbin Qu, chief economist, China & co-head of Asian economic research at HSBC, said in a statement.

“And the recent cash crunch in the interbank market is likely to slow expansion of off-balance sheet lending, further exacerbating funding conditions for SMEs. As Beijing refrains from using stimulus, the ongoing growth slowdown is likely to continue in the coming months.”

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