U.S. Markets closed

World stocks slide as China manufacturing shrinks

Kelvin Chan, AP Business Writer

HONG KONG (AP) -- World stock markets were mostly lower Monday after a survey showed that Chinese manufacturing shrank in April for the fourth month in a row.

The HSBC index of Chinese factory activity also fell short of its already weak preliminary result, stoking fears among investors that the slowdown in the world's second biggest economy is entrenched.

"People were in general expecting from the recent data that the market was stabilizing rather than slowing. This would seem to indicate that it's still slowing rather than stabilizing," said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities.

The index rose by 0.1 point to 48.1 in April, using a 100-point scale on which readings below 50 indicate contraction. The preliminary index level was 48.3.

Pessimism about China's manufacturing also offset some positive news on U.S. employment that showed employers in the No. 1 economy added more jobs than expected in April, pushing the unemployment rate to its lowest in six years.

Price changes were also more volatile because several major markets were closed, cutting trading volume, Sullivan said.

Markets in Japan, South Korea and Britain were closed for a public holiday.

In early European trading, France's CAC 40 shed 0.5 percent to 4,437.05 and Germany's DAX lost 0.4 percent to 9,514.65.

U.S. stocks were poised to open lower, with Dow futures down 0.3 percent to 16,403. Broader S&P 500 futures slipped 0.3 percent to 1,869.30.

Hong Kong's Hang Seng fell 1.3 percent to close at 21,976.33 while the Shanghai Composite in mainland China rallied in the final minutes of trading to finish 0.1 percent higher at 2,027.35.

An announcement by China's securities regulator on Sunday night unveiling prospectuses for 25 IPO applicants had also added to downward pressure by raising fears that supply of stocks would exceed demand.

Australia's S&P/ASX 200 also staged a late comeback to end 0.1 percent higher at 5,462.20. Benchmarks in Singapore and New Zealand fell.

In currencies, the dollar fell to 101.92 Japanese yen from 102.20 in late trading Friday. The euro rose to $1.3876 from $1.3871.

In energy markets, benchmark U.S. oil for June delivery added 62 cents to $100.38 in electronic trading on the New York Mercantile Exchange. The contract rose 34 cents to settle at $99.76 on Friday.