* Manufacturing data from China, U.S. boosts equities
* Euro remains under pressure as debt crisis festers
* Portugal rating warning also weighs
By Sanjeev Miglani
SINGAPORE, Dec 1 The euro wavered on Wednesday
as Europe's debt crisis deepened, but global stock markets
drew comfort from stronger-than-expected manufacturing data
from China and growing signs that the U.S. economy is improving.
Leading European stocks rose 0.9 percent in early
trade, echoing gains in Asia after surveys showed China's
factories ramped up production in November amid a jump in new
orders from both domestic and foreign customers. [ID:nTOE6B004C]
Similar surveys showed a pick up in manufacturing activity
in South Korea and India as well, helping to ease fears about
Europe's debt problems after Standard & Poor's put Portugal's
credit rating on review for a possible downgrade.
U.S. stock futures SPc1 rose 0.4 percent, pointing to a
higher opening on Wall Street later in the day.
The index of shares outside Japan rose 1.3
percent, powered by resource stocks and consumer staples,
while Japan's Nikkei edged up 0.5 percent after
falling nearly 2 percent the previous day.
"People are looking at the raft of positive data from the
region, and past the euro zone's problems," said Wai Ho Leong,
senior regional economist at Barclays Capital in Singapore.
"Asia is still the region to be in, and stocks are looking
attractive after last week."
Adding to the encouraging news from Asia, data overnight
showed U.S. consumer confidence rose to its highest level in
five months in November, while business activity in the
Midwest grew faster than expected, providing further evidence
of economic recovery. [ID:nN30263756]
The U.S. government's monthly employment report on Friday
is forecast to show another month of job gains.
The euro fell to around $1.2969 in early Asia
trade, a level not seen since mid-September, before paring
losses. It was trading at $1.3036 by 0805 GMT, slightly above
late U.S. levels.
But it remained near 11-week lows against the dollar as
markets waited to see if other fiscally weak euro zone
countries can avoid the debt crisis that has engulfed Greece
Although Portugal, much like Ireland earlier, has denied
it needs aid, markets are already discounting an eventual
rescue for Lisbon and watching growing signs of distress in
far larger economies such as Spain and Italy. [ID:nLDE6B005K]
While rescuing Portugal would be manageable, assistance
for Spain would sorely test the European Union's resources,
raising deeper questions about how long the 16-country euro
zone bloc can hold together and if the crisis will spread
"You really need some aggressive action from the
authorities in Europe to try and calm nerves and that's really
the key at this stage," Greg Gibbs, a strategist at RBS in
The euro has fallen some 9 percent from a November high
around $1.4281 and was down about 7 percent in November, the
biggest monthly fall since May.
"Our risk aversion barometer has reached the highest since
October 4 and shows little sign of turning around," Credit
Agricole said in a research note, adding the failure of an 85
billion euro bailout package for Ireland to stem the
haemorrhaging in the eurozone bond markets highlighted
difficulties policymakers faced.
The U.S. two-year swap spread widened to the most in four
months on Wednesday, driven by higher interbank rates, as
fears the euro zone's debt crisis may take a heavy toll on
the region's banks left dealers hungry for more dollar funding.
But Japanese government bond futures soared more than half
a point and yields plunged across the board on Wednesday, as
players covered short positions following a
10-year bond auction. [ID:nTOE6B0007]
Oil CLc1 rose 67 cents to $84.79 a barrel while cash
gold priced in euros hit a record at 1,068.70 euros an ounce,
reflecting the worries over Europe and investor moves into
(Additional reporting by Charlotte Cooper, Ian Chua; Editing
by Alex Richardson & Kim Coghill)
* For Reuters Global Investing Blog, click on
* For the MacroScope Blog, click on
* For Hedge Fund Blog, click on
blogs.reuterspersistent fears that
have a query or comment on this story, send an email to