US markets rebound driven by positive data from Eurozone and US - Standard Chartered Securities

US stocks closed flat followed by the Fed's signal that tapering is imminent. However it rebounded driven by positive data from the eurozone and US. On a positive note, US unemployment data fell to a five-year low, an indicator the labor sector is gradually improving. Those seeking unemployment benefits fell to the average of 330,500. Furthermore, US manufacturing activity hit a five-month high in August as hiring picked up and new orders increased at their fastest pace since January. Investors are however wary after Chairman Ben Bernanke said the board is 'broadly comfortable' with the idea of winding-down, yet deems the timing "not yet appropriate", providing no precise timeline.

European shares were little changed early on Friday, pausing after solid gains the previous day but set for their first weekly loss in around two months on potential of less US monetary stimulus. Expectations of less bond buying from the Federal Reserve caused a dip in stocks in the early part of the week, and Wednesday minutes from the US central bank's July meeting did little to change that view. Euro-zone business activity across has picked up this month at a faster pace than expected, surveys showed, led by Germany which enjoyed growing demand for its exports. Germany confirmed on Friday that its economy grew at 0.7% in the second quarter, while there was more welcome news from Britain as it revised up its earlier Q2 number.

Asian stocks fell after minutes from the July meeting of the Federal Reserve showed that officials were comfortable with scaling back its huge bond-buying program as the US economy grows stronger. On a positive note, markets turned positive after Purchasing managers surveys showed better-than-expected growth in the euro zone, a Chinese manufacturing rebound and US manufacturing activity rising to a five-month high this month. Nikkei rebounded and closed flat after upbeat factory activity data from around the world spurring broad gains.

Source : Equity Bulls

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