Global stocks gain momentum as data from the US and China grows

LONDON (Reuters) – Global equities advanced on Monday, helped by data showing that profits of Chinese industrial firms rose for the first time in four months and that US first quarter growth figures were strong last week.

The MSCI All-Country World Equity Index, which tracks stocks in 47 countries, rose 0.06% after the start of trading in Europe.

Most major European equity markets were stronger, with the pan-European STOXX 600 index up 0.1%. [.EU]

The Spanish IBEX 35 index, however, underperformed its peers, down more than half a percent after Prime Minister Pedro Sanchez overcame the challenge of right-wing nationalists in Sunday's elections. The elections had little immediate impact on the country's bond market. [GVD/EUR]

Shares of Italian banks gained momentum and Italian government bonds rebounded after S & P Global confirmed Italy's credit rating.

Still worried about uncertainty over the outlook for the global economy, investors were waiting for the US Federal Reserve this week and data on Chinese factories to get new clues about the direction of the world's major economies.

"For the securities operators, it seems that the important catalysts are on the rise: the United States sees strong domestic growth, low inflation keeps the Fed at bay and could potentially trigger a reduction in rates. So it seems that stocks should only go up in the short term, "said Konstantinos Anthis, head of research at ADSS.

Chinese blue chips rose more than 1% after losing 5.6% last week, leading the Shanghai .SSEC title to a higher intraday in afternoon trading.

Australian stocks fell 0.4% after hitting an 11-year high on Friday, while Seoul's KOSPI was up 1.4%.

Japanese financial markets are closed for a long holiday this week, but the Nikkei 225 futures index in Singapore was up 0.9%.

Monday's gains follow data showing that US gross domestic product grew 3.2% annualized in the first quarter.

Nomura FX strategist Jordan Rochester said last week's US GDP was fueled by rising inventories, government spending and a significant contribution from net trade. "None of these will probably be maintained, hence the limited market reaction," he said in a note to customers.

"But overall, last week was dominated by rising US stock prices and, as a result, outperforming the US dollar. In our opinion, this week should be put to the test of this new trend, "he said, referring to upcoming economic data this week.

In China, new data shows that industrial profits rose in March after four months of contraction, but analysts said sentiment remains fragile. Economists polled by Reuters expect the activity of factories in the world's second-largest economy to grow at a steady but modest pace in April.

In contrast to weak Asian markets last week, Wall Street ended Friday in style, propelled by GDP figures.

The March reading for basic personal consumption expenditure (PCE), the Fed's preferred inflation measure, is due to be released later on Monday. The Federal Open Market Committee (FOMC) of the central bank will announce its political decision on Wednesday. President Jerome Powell should balance strong domestic growth data with lingering concerns about the global outlook.

Markets will also look at global surveys of factory activity this week, including on official and private readings of Chinese manufacturing industry, which will be released Tuesday.

With Japan on extended recess, the currency markets were calm before the FOMC meeting and the number of jobs in the United States. The dollar was up 0.2% against the yen at $ 111.74 and the euro was up 0.1% at $ 1.1162.

The dollar index, which tracks the greenback versus a basket of six major rivals, fell 0.03% to 97.985.

Oil prices dropped, prolonging a fall since Friday that ended weeks of recovery, after President Donald Trump asked his producer club, OPEC, to increase production to mitigate the impact. US sanctions against Iran. [O/R]

Brent crude fell by half a percent to 71.80 dollars a barrel.

Spot gold prices declined 0.3% to $ 1,281.81 per ounce. [GOL/]