Global stocks drop on weaker China manufacturing

Global markets began the new year on a subdued note, mostly falling Thursday after a Chinese manufacturing survey suggested the world's second-largest economy might be slowing.

An industry group, the China Federation of Logistics & Purchasing, said its purchasing managers' index declined to 51 points from November's 51.4 on a 100-point scale on which numbers above 50 indicate expansion. A separate survey by HSBC Corp. declined to 50.5 from November's 50.8.

"This is the first moderation in six months, suggesting that the growth recovery since mid-July might have started to lose some stream," Bank of America economists Xiaojia Zhi and Ting Lu said in a report.

China's benchmark Shanghai Composite Index shed 0.3 percent to 2,109.3, while Hong Kong's Hang Seng Index fell 0.1 per cent to 23,278.0.

In Europe, stocks lost early gains in thin trading volumes. Britain's FTSE 100 dropped 0.2 per cent to 6,734.54, while France's CAC-40 fell 0.9 percent to 4,304.2. Germany's DAX was down 0.6 percent to 9,498.28.

Wall Street was expected to open lower, with both Dow and S&P 500 futures down 0.2 per cent.

Elsewhere, in Asia, Tokyo was closed for the New Year's holiday. Seoul's main index lost 2.2 per cent to 1,967.1, while Taiwan's Taiex was flat at 8,612.5. Benchmarks in Malaysia and Thailand also fell. India's Sensex added 0.5 per cent to 21,239.0.

In currency markets, the dollar fell 0.2 per cent to 105.05 yen while the euro fell 0.7 per cent to $1.3653.

The benchmark oil contract lost 64 cents to $97.78 per barrel in electronic trading on the New York Mercantile Exchange.

- AP