Groggy start to year for shares after 2013 party

Thu Jan 2, 2014 9:29am EST
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By Marc Jones

LONDON (Reuters) - World share markets made a groggy start to 2014 on Thursday, with investors using some disappointing Chinese manufacturing data as a reason to cash in on some of last year's gains.

After enjoying their best run in 15 years last year, U.S. shares were expected to edge lower when trading begins. Further gains depend on stronger growth this year, and investors were looking to U.S. jobless claims and updated December PMI figures to gauge the improvement in the world's largest economy.

Manufacturing data from China overnight and on Wednesday proved disappointing. Equivalent data that showed euro zone manufacturing running at its fastest rate since mid-2011 were not enough to lift shares.

The pan-European FTSEurofirst 300 .FTEU3 was down 0.3 percent before the U.S. open. It had started the day at a 5 1/2- year high. Earlier declines in Asia had left MSCI's 45-country share index .MIWD00000PUS down 0.5 percent.

"We think it is a temporary blip in China, but that and also perhaps the data showing the contraction in Singapore's economy earlier, maybe gave the market a slight scare," said ABN Amro economist Aline Schuiling.

Traders showed more appetite for both growth-attuned commodities and the dollar. At the same time, they trimmed their holdings of safe-haven bonds.

Gold grabbed the limelight, climbing 1.5 percent to $1,220 an ounce. The move recouped some of the losses that made last year gold's worst in three decades. <GOL/>

The buying spilled over into silver and copper, with dealers talking of demand from Chinese traders looking to pick up commodities on the cheap. Three-month LME copper rose to its highest in seven months.   Continued...

People walk past an electronic information board at the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth