Global stocks turn sluggish as China's manufacturing slumps

Beijing: Global markets sank Thursday after Chinese manufacturing weakened and Russian shelling around Ukraine's capital shook hopes for progress in peace talks.

London, Shanghai, Paris and Tokyo declined while Frankfurt opened higher. Oil fell almost $5 per barrel in New York but stayed above $100 following reports President Joe Biden would release US reserves to cool surging prices amid anxiety about possible disruption to Russian supplies. OPEC and allied oil producers including Russia will be deciding Thursday how much crude to pump to the world. Analysts expect the group, known as OPEC+, to stay on its schedule of gradual increases to restore production cuts made during the depths of the corona virus pandemic in 2020.

Russian forces were shelling areas near Kyiv and another city after Moscow said it would scale back operations there to promote trust. Virtual talks on trying to end the five-week-old war are expected Friday. Russia is "pouring cold water on headlines of constructive cease-fire talks," Stephen Innes of SPI Asset Management said in a report. In early trading, London's FTSE 100 lost less than 0.1 per cent to 7,575.04 while Frankfurt's DAX added 0.1 per cent to 7,578.75. The CAC 40 in Paris shed less than 0.1 per cent to 6,743.19.

On Wall Street, the future for the benchmark S&P 500 index was 0.2 per cent higher a day after falling on weaker-than-forecast US economic growth. The future for the Dow industrials was virtually unchanged. In Asia, the Shanghai Composite Index lost 0.4 per cent to 3,252.20 after an index of Chinese manufacturing activity fell to a five-month low following the shutdown of much of Shanghai and two smaller industrial cities to fight corona virus outbreaks. The Hang Seng in Hong Kong sank 1.1 per cent to 21,996.85. "The near-term outlook remains highly uncertain," Julian Evans-Pritchard of Capital Economics said in a report.

"Even if the outbreak is brought under control soon, it will still take a while for the economy to get back on track." The Nikkei 225 in Tokyo shed 0.7 per cent to 27,821.43 and Sydney's S&P-ASX 200 lost 0.2 per cent to 7,499.60. The Kospi in Seoul gained 0.4 per cent to 2,757.65 after data showed February industrial production improved. India's Sensex shed 0.2 per cent to 58,560.02. New Zealand and Jakarta gained while Singapore and Bangkok declined.

On Wednesday, the S&P 500 declined 0.6 per cent after Commerce Department data showed the US economy grew at an annual pace of 6.9 per cent in the final quarter of 2021.