Stocks buoyant despite China factory data

Global stocks extended gains from the previous session on Thursday (October 1st), moving higher after the worst quarter for equities in four years.

Asian markets rose overnight despite weak manufacturing data from China pointing to more fears about the health of the global economy.

Factory output contracted for the second consecutive month in September, China’s official purchasing managers’ index showed.

The Nikkei closed up nearly two per cent at 17,722.42, despite the Bank of Japan's Tankan survey showing business confidence falling.

MSCI's broadest index of Asia-Pacific shares outside Japan rallied after slipping to a three-and-a-half year low earlier in the week. The gauge rose 1.5 per cent after Wednesday’s 2.3 per cent gain, but still lost 15 per cent in the third quarter.

Stocks had earlier gained on Wall Street as US indices pared their quarterly losses.

The Dow Jones industrial average closed up 235.57 points at 16,284.70, but was down around seven per cent for the third quarter. Bellwether stock Caterpillar was the worst faller, declining 23 per cent, while Nike was up nearly 14 per cent.

The S&P 500 was up nearly two per cent for the day at 1,920.03, but is also in the red for the quarter, down 6.94 per cent.

In Europe, the FTSE 100 rose again on Thursday, led by mining stocks. Glencore, which suffered a 30 per cent single-day fall earlier this week, rose four per cent to trade just below 95 pence.

Anglo American, BHP Billiton and BP were all up more than three per cent as the UK blue chip index added 1.18 per cent in morning trade. The DAX in Germany was flat, while France’s CAC 40 rose 0.8 per cent.

Meanwhile, oil prices rallied strongly as a mixed set of reports from Asia created a more positive outlook.

US light crude was up 2.5 per cent at $46.19, while Brent added two per cent at $49.32 a barrel.

Gold shed 0.25 per cent to $1,112.40 an ounce, its lowest in two weeks as Wednesday’s labour market data from ADP showed strong gains in US private sector jobs.

The upbeat data comes ahead of the month's non-farm payrolls figures on Friday, which may offer more clues about how close the Federal Reserve is to raising interest rates.