Global stocks turn mostly lower on soft China factory data – U.S. News & World Report

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The Associated Press

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, June 1, 2016. Asian stock markets were uneven on Wednesday after reports on China’s manufacturing activity indicated lingering weaknesses in the world’s second-largest economy and U.S. consumer confidence dropped for a second month. (AP Photo/Ahn Young-joon) The Associated Press

By YOUKYUNG LEE, AP Business Writer

SEOUL, South Korea (AP) — Global stock markets turned mostly lower on Wednesday after reports on China’s manufacturing activity indicated lingering weaknesses in the world’s second-largest economy, and U.S. consumer confidence dropped for a second month.

KEEPING SCORE: Britain’s FTSE 100 dropped 0.6 percent to 6,194.49 while Germany’s DAX fell 0.7 percent to 10,193.34. France’s CAC 40 slid 0.7 percent to 4,473.61. Futures augured a weak start on Wall Street. Dow futures lost 0.3 percent while S&P futures also fell 0.3 percent.

CHINA DATA: Two surveys showed persisting weakness in China’s factory activity last month. An official index by the Chinese Federation of Logistics & Purchasing, based on a survey of factory purchasing managers came in at 50.1 in May. Numbers above 50 indicate expansion of factory activity while those below 50 indicate contraction. The private Caixin/Markit survey was more pessimistic with activity falling to 49.2 last month from 49.4 in April.

ANALYST’S TAKE: “Overall, China’s economy has not been able to sustain the recovery it had in the first quarter and is in the process of bottoming out,” said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group. “The government still needs to make full use of proactive fiscal policy measures accompanied by prudent monetary policy to prevent the economy from slowing further.”

U.S. CONSUMERS: Reports released on Tuesday showed U.S. consumer confidence fell in May for a second month and is now at the lowest level since November. The Conference Board said that its index of consumer confidence slipped to 92.6 from 94.7 in April as consumers remained cautious about the outlook for business and job market conditions.

ASIA’S DAY: Asian stock markets began uneven but closed mostly lower. Japan’s Nikkei 225 finished 1.6 percent lower at 16,955.73 while South Korea’s Kospi inched down less than 0.1 percent to 1,982.72. Hong Kong’s Hang Seng index was down 0.3 percent to 20,760.98 while China’s Shanghai Composite Index was down 0.1 percent to 2,913.51. Australia’s S&P/ASX 200 slumped 1 percent to finish at 5,323.20. Stock markets in Taiwan, Indonesia and the Philippines were higher but stocks were lower in Singapore and New Zealand.

OIL: Benchmark U.S. crude oil fell 84 cents to $48.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 88 cents to $49.02 a barrel on Tuesday. Brent crude, used to price international oils, gave up 86 cents to $49.03 a barrel in London.

CURRENCIES: The dollar weakened to 109.56 yen from 110.71 yen. The euro strengthened to $1.1162 from $1.1131.

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