US stocks rise on investor confidence in economic outlook, while Chinese property stocks dent Asian equities

Traders work on the floor of the New York Stock Exchange
  • US stocks looked set to open higher after the S&P 500 rose by the most in nearly 3 weeks.
  • The Evergrande debt saga is still weighing on sentiment in Asian markets.
  • "China markets don't have a lot to cheer about today," an analyst said.

US stocks rose on Thursday as investors concentrated on strong regional manufacturing activity that underpinned confidence in the broader economic outlook, while debt problems at China's second-biggest property developer weighed on Asian equities.

Futures on the Dow Jones rose 0.6%, while those on the S&P 500 and Nasdaq rose 0.8% as of 5:10 a.m. ET, suggesting a higher start to trading later in the day.

The NY Empire State Manufacturing Index, a gauge for business conditions for New York manufacturers, massively beat expectations in September, jumping to 34.3 from 18.3 in August. Analysts expected a reading of 18.

"That was enough to flush out the pent-up dip buyer demand out there with markets proclaiming the US recovery was back on track," Jeffrey Halley, a senior market analyst at OANDA, said.

Investors chose to focus on this piece of data, rather than soft US industrial production figures overnight, which missed expetations.

The S&P 500 rose by its most in nearly 3 weeks on Wednesday, rising 0.8%, as cyclical industries and tech stocks took the index back to within 1.3% of its all-time highs, Deutsche Bank strategists said. The Nasdaq closed 0.8%, finishing higher for the first time in six sessions.

US weekly jobs data and monthly retail sales are due later Thursday.

Asian equities fell as sentiment was still centered around the unfolding collapse of Evergrande after the housing authority notified China's major banks that the property developer won't be able to pay interest payments on loans due September 20.

The Shanghai Composite fell 1.3%, Tokyo's Nikkei fell 0.6%, and Hong Kong's Hang Seng fell 1.4%

The Hang Seng Composite Index that tracks properties and construction stocks fell as much as 4.3% at one point. That included big declines for developers like Guangzhou R&F, which plunged 12.2%, and Sunac China, which fell 11.5%.

"Coming after the carnage in gaming stocks this week after the latest government investigation targeted Macau's casinos, China markets don't have a lot to cheer about today," Halley said.

The government in Macau, the only location in China where gambling is legalized, said this week it would begin consultation on a potential overhaul of the industry.

Meanwhile, European stocks traded higher on Wednesday, driven by a 20% jump in Lagardere after French media giant Vivendi said it would buy a stake in the publishing firm.

Paris' CAC 40 rose 1%, making it one of the stand-out performers in the region. London's FTSE 100 gained 0.5% and the Euro Stoxx 50 rose 0.8%.

Oil prices made solid gains after data showed nationwide crude inventories fell more than expected in the latest week, allaying some concern about the demand outlook. Brent crude was last trading 0.2% higher at $75.64 a barrel and West Texas Intermediate rose 0.2% to $72.75 a barrel.

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