Stocks muted despite pickup in China manufacturing

Stocks muted despite pickup in China manufacturing

Asian and European stock markets were muted Friday despite an uptick in China’s manufacturing as investors continued to fret that the U.S. Federal Reserve will begin cutting its stimulus as soon as January.

Two measures of China’s manufacturing improved in October in a possible sign of economic recovery. China’s growth rebounded to 7.8 percent in the three months ended September from the previous quarter’s two-decade low but there are doubts whether the improvement will continue over the remainder of the year.

Worries about less expansive U.S. monetary stimulus continued to preoccupy investors.

The Federal Reserve’s announcement this week that it would maintain its monthly bond purchases at $85 billion was widely expected. But the central bank no longer expressed concern, as it did in September, that higher mortgage rates could hold back hiring and economic growth. And its statement made no reference to the 16-day government shutdown, which economists say slowed growth this quarter. Some analysts said that suggests reduction of the stimulus could begin early next year.

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Source: AP-Excite

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