World stocks propped by China PMI; U.S. data eyed
By Emelia Sithole-Matarise
LONDON (Reuters) - World stocks were underpinned by surprisingly firm China manufacturing data on Monday, though further evidence that the world's second biggest economy is slowing, along with euro zone debt jitters, kept demand for riskier assets in check.
Wall Street was set to start the second quarter flat as the focus turned to equivalent U.S. figures later in the day, with investors keen to see if recent momentum in the world's largest economy could be maintained.
European equities started with modest gains after data on Sunday showed China's official Purchasing Managers' Index (PMI), which covers large factories, jumped to an 11-month high of 53.1 in March, beating forecasts.
The pan-European FTSEurofirst 300 index .FTEU3, which ended the last quarter with its best first-quarter performance since 2006, then fell.
Traders citing media reports the Bundesbank would not accept bonds of several countries, including Portugal, as collateral. The Bundesbank denied the reports, after which the index pared losses to around 0.25 percent from 0.4 percent.
"This indicates nervousness about euro zone sovereign debt is not gone at all," a German trader said.
MSCI's all-country world equity index .MIWD00000PUS was little changed on the day, having inched up 0.1 percent earlier.
Equivalent euro zone figures, which had little impact on the market, confirmed earlier estimates that the manufacturing sector shrank for an eighth month, painting a grim outlook for the region as it struggles to generate the growth needed to tackle its debt. Continued...