Shares resume upward trend on China data; dollar remains weak

Thu Oct 24, 2013 1:48pm EDT
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By Angela Moon

NEW YORK (Reuters) - Global equity markets resumed their recent upward trend on Thursday, boosted by signs of growth in Chinese manufacturing, while the euro rose to a fresh two-year peak against the dollar.

On Wall Street, the S&P 500 index was on track for its tenth gain in the past 12 sessions as expectations for steady accommodative monetary policy for the foreseeable future offset a mixed batch of earnings and economic data. The benchmark index closed at a record on Tuesday.

Boosting investors' appetite for risky assets was data showing growth in China's vast factory sector reached a seven-month high this month, easing concerns about a slowdown in Chinese exports, which would point to weakening global demand.

In the United States, initial claims for state unemployment benefits fell less than expected in the latest week. The preliminary read of Markit's Manufacturing Purchasing Managers Index grew at its slowest pace in a year this month and factory output contracted for the first time since late 2009.

The euro was up 0.2 percent at $1.3802, having hit $1.3824, its strongest since November 2011, while the dollar fell broadly, hitting a near nine-month low against a basket of currencies .DXY of 79.081. It was last down 0.1 percent at 79.166.

U.S. Treasuries yields held near three-month lows on Thursday as expectations that the Federal Reserve is still months away from reducing the size of its $85-billion-a-month bond-purchase program kept up strong demand for the debt.

Fed policy is seen as very data-dependent, though economic indicators over the coming months are likely to be skewed by the effects of the government shutdown. That could limit insight on the state of the economy and to what degree the shutdown and the fight over raising the debt ceiling harmed growth.

"What we've been seeing since the government shutdown and debt ceiling was resolved is a desire to jump back into Treasuries," said Jason Rogan, managing director in Treasuries trading at Guggenheim Partners in New York.   Continued...

A man walks through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett