The second quarter of trading kicked off with gloomy data from Japan, overshadowing encouraging figures from China's manufacturers. As Kirsty Basset reports, the downbeat numbers drove stocks and oil lower, and supported safe-haven assets like gold and the Japanese yen.
Mixed data out of Asia meant a slow start to the second quarter for world stocks. Japan's Nikkei sank 3.5 percent after a survey of major manufacturers by the Bank of Japan found sentiment at its lowest in almost three years. It's raising concerns the Bank of Japan's shift to negative rates is not working. And that's putting pressure on Prime Minister Shinzo Abe and the central bank to do more. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK ANALYSIS, JAN RANDOLPH, SAYING: "Later this month they may have to look again at further quantitate easing measures. But I think just as important, some of the heavy lifting has to be done by the government. It really has to get down to some structural reforms." The picture was brighter in China where the factory sector grew for the first time in nine months and another positive survey showed a pickup in services. It came a day after Standard and Poor's cut China's credit outlook to negative, saying reforms are not being implemented quickly enough. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK ANALYSIS, JAN RANDOLPH, SAYING: "The long job of restructuring the economy is on course, although this is a multi year project. They are only one or two years into it." Meanwhile in the euro zone, manufacturing was in better shape than initially thought, but growth remained weak, despite deep price cutting - and easing by the European Central Bank. Europe's main indices fell as much as two per cent. Developments the U.S. Federal Reserve is keeping a close eye on. Despite U.S. employment increasing solidly in March, the Fed is expected to remain cautious in raising rates, due to slowing global growth.