Asian stocks were broadly lower this morning despite China reporting its manufacturing activity increasing for the fifth month in a row. Dominating sentiment by investors was the fear that the reduced demand from a contracting Europe will damage key export markets for the likes of China and Japan as Spain announced its GDP shrinking by 0.3% in Q1 of 2012, having shrunk by 0.3% in the final quarter of 2011. This puts the Spanish economy in its 2nd recession since 2009 and follows the surprise news last week that the UK has entered a double dip recession.

As Hong Kong markets are closed for a  public holiday today, the Nikkei 225 of Japan reopened after its on holiday yesterday and promptly declined – at current time of writing 4.31am GMT – the Nikkei was down 1.42%, valued at 9385.50. The S & P of Australia was up 0.57%, valued at 4492.60, having fell over 1% increase earlier in the trading session.

Offering some comfort to investors was the release from China, who relies strongly on its manufacturing and export sector for growth, of the official Purchasing Manager’s Index (PMI) increasing to 53.3 in April from 53.1 in March – the 5th consecutive month of expansion. Although the growth rate is slower than the same time last year, the steps Beijing has taken to boost the economy appear to be having an effect. The central bank of China reduced the amount of money that banks hold in reserve twice over the past couple of months, in an effort to try and boost lending. This saw Chinese banks extend 1.01 trillion yuan in new loans in March, higher than the forecast of 800 billion yuan.
Today at 2pm GMT in the US – the ISM is released whilst at 5pm GMT – Gov Carney speaks in Canada. Later on at 10.45pm GMT the New Zealand unemployment rate is released. Today should see some good profit opportunities as investors look for bargains and consolidate positions.

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