Stocks struggle amid China manufacturing data

By msnbc.com news services

Stocks were struggling amid surprisingly firm China manufacturing data on Monday, with further evidence that the world's second biggest economy is slowing, along with euro zone debt jitters, keeping demand for riskier assets in check.

Investors are keen to see if recent momentum in the world's largest economy could be maintained.

European equities started with modest gains after data on Sunday showed China's official Purchasing Managers' Index (PMI) , which covers large factories, jumped to an 11-month high of 53.1 in March, beating forecasts.

ISM March manufacturing index is in focus. Economists in a Reuters survey expect a reading of 53.0 versus 52.4 in February, with some in the market saying this could be optimistic.

"The forecasts look optimistic and therefore, particularly if it comes in below last month's reading, you could see... stocks selling off again and bonds having a bit of a bounce," said Marc Ostwald, strategist at Monument Securities in London.

The Japanese yen, which tends to gain when investors' appetite for risk sours, pared losses as some analysts cautioned not to read too much into the stronger-than-expected figure from China.

Reuters contributed to this report.

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