December 12, 2013
Factory growth buoys shares as Syria risk eases for now
A delay in potential US military action in Syria and improving economic data from China and Europe lifted world share markets today and sent the safe-haven Japanese yen lower.
Oil prices rebounded on the brighter economic outlook after falling initially following US President Barack Obama's decision to rule out military action against Syria until lawmakers had had a chance to vote on the plan.
The prospects for the global economy have brightened considerably according to a fresh round of purchasing managers' surveys (PMIs) for August, which provide a guide to future levels of economic activity.
Euro zone factory activity rose at its fastest pace in over two years, and manufacturing in struggling Spain grew for the first time since April 2011.
MSCI's world equity index was up 0.6 percent, after four consecutive weekly losses during which investors positioned for the US Federal Reserve to begin trimming its monetary stimulus, perhaps at its meeting later this month.
Tokyo's Nikkei index rose 1.4 percent and European shares posted their biggest daily percentage gain in two months, rising 1.7 percent by mid-morning, as the upbeat economic data pushed investors into mining stocks.
UK factory data was noticeably bullish, with the UK manufacturing PMI hitting a near 20-year high, sending Britain's FTSE 100 index up 1.5 percent.
Wall Street will be closed for the Labor Day holiday.