Global stocks drift after Chinese figures raise concerns

LONDON — Global stock markets drifted lower Tuesday after Chinese factory activity came in weaker than expected and raised concerns about the state of the world's number 2 economy.

Monthly gauges of Chinese manufacturing from a business magazine and an industry group showed activity grew in April but more slowly than the March rate. That added to signs China's economic downturn is bottoming out, but investors were disappointed the data weren't better.

Caixin magazine's purchasing managers' index showed factory activity fell to 50.2 on a 100-point scale from March's 50.8. A separate index by the China Federation of Logistics & Purchasing declined 0.4 points to 50.1, just above the 50-point line that indicates activity is accelerating.

Joshua Mahony, Senior Market Analyst at IG in London, said the surveys have "done little to boost the economic outlook for a country which has only recently seen its critical manufacturing sector move out of contraction."

That weighed on sentiment in Asia and the ensuing session in Europe despite figures showing that the eurozone economy grew by a slightly greater than anticipated quarterly rate of 0.4 percent in the first three months of the year.

In Europe, France's CAC 40 fell 0.2% to 5,569 while Britain's FTSE 100 index declined 0.2 percent at 7,426. Germany's DAX was steady at 12,328.

Wall Street was poised for a fairly uninspiring open with Dow futures and the broader S&P 500 futures both flat.

On Monday, the S&P 500 index moved further into record territory after government figures showed the U.S. economy grew at a solid annualized rate of 3.2 percent in the first quarter with consumer spending up strongly.

But the same report also showed that the Federal Reserve's preferred measure of price changes remains well below its target. Low inflation gives the central bank more leeway to hold off on raising interest rates. It was the Fed's pledge earlier this year to be patient on rates that sent stocks surging. The Federal Reserve will meet again on interest rates this week, and most investors expect it to make no changes.

Earlier in Asia, Hong Kong's Hang Seng lost 0.6% to 29,699.11 and Seoul's Kospi declined 0.6% to 2,203.59.

The Shanghai Composite Index gained 0.5% to 3,078.34 while Sydney's S&P-ASX 200 shed 0.5% to 6,441.82. India's Sensex gave up 0.4% to 38,901.32.

ENERGY: Benchmark U.S. crude gained 97 cents to $64.47 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, rose a dollar to $73.04 per barrel in London.

CURRENCY: The euro was solid after the eurozone growth data, trading 0.3 percent higher at $1.1215. The dollar was 0.3 percent lower at 111.23 yen.

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