LONDON - World share markets made a soft start to 2014 on Thursday in the wake of disappointing data on Chinese manufacturing, while investors showed renewed appetite for commodities and the dollar as the new year got underway.
Gold grabbed the limelight with a 1.5 per cent jump to $1,220 an ounce, recouping just a little of the losses that made last year its worst in three decades.
The buying spilled over into silver and copper, with dealers talking of demand from Chinese traders looking to pick up commodities on the cheap.
The other action was in the yen, which resumed its long decline on the back of speculation the Bank of Japan will ease policy further while other central banks stay put or begin to rein in the huge amounts of cash being pumped into the economy.
The drop in the yen has been viewed as positive for Japanese exports and corporate earnings, and a major reason its share markets outperformed all others last year.
After China's official Purchasing Managers' Index (PMI) fell to 51.0 in December, manufacturing indices for Europe and the United States will offer more ideas on how global industry was faring into the end of last year.
Figures from the euro zone set a positive early tone as they showed manufacturing growing at the fastest rate since mid-2011 in December on brisk business in Germany and Italy, though a moribund French economy continued to weigh.
"With producers reporting further growth of new orders, exports and backlogs of work, the stage is set for a good start to 2014," said Chris Williamson, chief economist at Markit, which compiles the survey of purchasing managers.
European stocks .FTEU3 had started the year at a 5-1/2 year high, but an initial push higher proved short-lived despite the upbeat data as London's FTSE .FTSE, Paris's CAC 40 .FCHI and Frankfurt's Dax .GDAXI dropped 0.5, 0.6 and 0.5 per cent respectively.
Safe-haven European benchmark German bonds were also out of favour as investors continued to shed them in favour of riskier assets, while the euro sagged to a near one-week low as the dollar .DXY strengthened.