* Euro zone PMIs point to regional recovery
* Shares jump, euro hits 1-month high, Bunds dip on data
* European recovery offsets slowing Chinese output
* Apple sales boost tech stocks, Wall Street seen higher
By Richard Hubbard
LONDON, July 24 Evidence of growth in the euro
zone and strong smartphone sales by technology giant Apple
lifted European shares and the euro on Wednesday, offsetting the
signs of a steady slowdown in China's giant economy.
Initial estimates of manufacturing activity across the
17-nation currency bloc showed the region on course to end its
18-month old recession, led by an upsurge in activity at German
and French factories.
The data sent the euro to a one-month high against the
dollar past $1.3250, extended a rally in European shares
and saw German bond futures fall 0.5 percent.
"It looks like moderate growth for Europe," said Andrew
Milligan, head of global strategy at Standard Life Investments.
"But an acceleration is not very likely at the moment, and there
is the potential for a political event happening which might
make turn investors cautious again."
The European Central Bank's latest quarterly bank lending
survey, also out on Wednesday, added to the need for caution,
pointing to a further toughening up of lending standards though
consumer credit was getting easier for the first time since
Nevertheless, by midday Europe's broad FTSEurofirst 300
index was 0.9 percent higher, while the euro zone's
blue chip index had gained 1.1 percent.
The gains were bolstered by a 1.0 percent rise in technology
stocks on the back of Apple Inc's forecast-beating
results posted after the U.S. market closed on Tuesday. Demand
for Apple shares when trading resumes later in the day was
expected to lead to higher start on Wall Street.
Shares in British chip designer ARM Holdings, which designs
chips for use in mobile computers and telephones including
Apple's iPhone, also benefited, rising 5.0 percent.
MSCI's world equity index had only edged up
0.2 percent as Asian shares were held back by concerns over
The renewed worries over China stemmed from a survey of its
vast manufacturing sector which found activity had slowed to an
11-month low in July, suggesting the already slowing economy was
still losing momentum.
China's slowdown, which has raised the chance of a hard
landing for the world's second largest economy, has hit other
emerging market shares and currencies hard as investors eye the
better opportunities in the developed markets, especially the
"In America we've got the best of all possible worlds which
is confidence in an economic recovery and a central bank not
unduly trying into bring this to a halt," said Milligan.
The better prospects for the U.S. economy supported the
greenback which rose 0.6 percent to around 100 yen,
moving away from a one-week low of 99.13 yen touched on Tuesday.
The dollar index extended its gains as well, adding
0.3 percent to 82.153 after skidding to a one-month low of
81.926 on Tuesday.
PILLAR OF SUPPORT
Some commodities were also getting battered from the weak
Chinese data as it has been a major importer of raw materials,
supporting prices in recent years.
"It adds to the concern about the outlook for demand, and
brings into question just how strong Chinese commodities demand
will be," said Alexandra Knight, economist at National Australia
Brent oil was down 75 cents to $107.67 a barrel and
U.S. crude had fallen 23 cents at $107 by 1200 GMT, after
ending 29 cents higher.
The Australian dollar, heavily exposed to Chinese
demand, slipped 0.4 percent to $0.9254, down from a near
one-month high of $0.9320.