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Markets lifted by Chinese manufacturing expansion
NEWS that China’s manufacturing sector expanded in May for the third consecutive month boosted optimism and lifted world markets yesterday.
China’s official purchasing managers’ index (PMI) fell to 53.1 from 53.5 in April, but remained above the critical 50 level, which separates expansion from contraction.
Investors were relieved that the pace of contraction was slowing in the world’s third-largest economy and European and US markets rallied strongly yesterday on the back of the Chinese data and better-than-expected Eurozone PMI.
The FTSE 100 rose by 2 per cent and the S&P 500 jumped by 2.5 per cent.
The markets were tracking earlier gains in Asia, where the Nikkei rose 1.6 per cent and the Australian dollar hit an eight-month high.