Wednesday, 24 April 2013

Markets rise as manufacturing slows

Markets ended positively on Tuesday, especially in Europe, where the STOXX Europe 600 Index jumped 2.4 percent, the biggest rise since 3 August. In the US, the S&P 500 rose 1.0 percent.

European government bonds also rose on Tuesday. The yield on Italy's 10-year government bonds in particular fell as much as 17 basis points to 3.89 percent, the lowest since 27 October 2010, while the two-year yield touched 1.125 percent, the lowest since Bloomberg began compiling the data in 1993.

Raised expectations for a rate cut from the European Central Bank may have helped boost markets after Markit's composite index for the euro area remained in contraction territory in April, staying unchanged from March at 46.5 based on a flash reading released on Tuesday. The services index rose to 46.6 in April from 46.4 in March while the manufacturing index fell to 46.5 from 46.8.

Meanwhile, manufacturing activity in China slowed in April. HSBC's flash manufacturing PMI came in at 50.5, down from 51.6 in March.

US manufacturing activity also slowed in April. Markit's flash US manufacturing PMI fell to 52.0 from 54.6 in March.

Another report from the US on Tuesday showed that new home sales increased 1.5 percent in March.

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