Global stocks were mixed Tuesday, with European stocks all down in early trading but Australia’s S&P ASX 200 index making solid gains after the Australian central bank cut interest rates.
KEEPING SCORE: Britain’s FTSE 100 was down 0.8 percent to 6,189.84. France’s CAC 40 shed 1.4 percent to 4,378.75 in early trading. Germany’s DAX fell 1.7 percent to 9,952.15. U.S. futures indicate lower opening on Wall Street, with both the Dow futures and S&P futures down 0.6 percent.
ASIA’S DAY: Australia’s S&P/ASX 200 closed 2.1 percent up to 5,353.80 after the Reserve Bank of Australia lowered the official interest rate by 25 basis points to 1.75 percent effective Wednesday, with RBA Governor Glenn Stevens pointing to lower than expected inflationary pressures, slow but continued global economic growth, and Australia’s trade remaining much lower than in recent years. The Shanghai Composite index rose 1.8 percent at 2,992.64. Hong Kong’s Hang Seng shed 1.8 percent to 20,676.94. South Korea’s KOSPI gained 0.4 percent to 1,986.41. Southeast Asian markets were mixed. Japan’s stock market is closed for the Golden Week holidays.
THE QUOTE: “The question now is whether the RBA will back this with a further cut this year,” said Chris Weston, chief market strategist of IG in Melbourne, Australia. “Certainly the statement leaves the door open to further easing although it is not sufficiently dovish enough to feel they are going to cut below 1.5 percent anytime soon.”
CHINA’S MANUFACTURING SLOWS: Chinese manufacturing activity weakened further in April despite government stimulus, a survey showed Tuesday, indicating the economy has yet to rebound from a downturn. The Caixin magazine purchasing managers’ index declined to 49.4 from March’s 49.7 on a 100-point scale on which numbers below 50 show activity contracting. It said conditions have worsened in each of the past 14 months. Beijing has tried to shore up slowing economic growth by boosting spending on public works projects, expanding credit and easing policies on real estate to encourage purchases. Some indicators improved in March but analysts warned that was unlikely to last.
ENERGY: Benchmark U.S. crude oil lost 30 cents to $44.47 a barrel in electronic trading on the New York Mercantile Exchange. It fell $1.14 to close at $44.78 per barrel on Monday. Brent crude, the international standard, fell 30 cents to $45.54.
CURRENCIES: The euro rose to $1.1585 from $1.1525 on Monday. The dollar fell to 105.75 yen from 106.45 yen.