Support
China’s manufacturing sector rebounds
Stock markets rise after positive economic data
The Caixin Manufacturing PMI index in China rose to 50.9
Chinese and Asian stocks rose after positive data from China
Oil rose again to levels of $68.70 per barrel
Good data from China
A positive turnaround in the Chinese manufacturing sector, which saw growth driven by improved production and demand in May. This development provided relief to struggling companies that had been affected by declining profits.
The Caixin Manufacturing PMI index, a key indicator of manufacturing activity, rose to 50.9 in May from 49.5 in April, indicating a return to growth.
Although the services sector contracted recently and concerns about declining global demand persist, the latest data supports the notion of a recovery in demand in the world's second-largest economy. This has sparked debates on the need for caution and continued monitoring of economic data in the coming months as China emerges from three years of strict COVID-19 restrictions.
Looking at specific indicators within the manufacturing sector, the sub-indicators revealed the fastest growth in factory output in 11 months, and new orders, including new exports, expanded in May.
Chinese stocks responded positively to this news, with the CSI 300 index experiencing a rise. However due to business confidence data declining, concerns about global economic prospects will still weigh for some time. Especially companies in the industrial sector remaining cautious about employment, as the employment sub-index shrank for the third consecutive month in May.
Oil recovers too
Oil prices rose on Thursday, recovering from previous losses, as a crucial vote on the US debt ceiling bill passed, boosting optimism about increased demand growth in the world's largest oil consumer.
Brent crude futures for August rose by 0.76% to $73.15 per barrel, while US West Texas Intermediate crude rose by 0.68% to $68.55 per barrel.
The US House of Representatives' approval of a bill to suspend the $31.4 trillion debt ceiling of the US government improved the chances of avoiding a catastrophic government default.
On the other hand, positive economic data from China contributed to the optimistic outlook regarding the recovery of demand in the world's second-largest economy.
