Market update: Markets pleased with healthy factory data from China

Despite the ‘on again, off again’ fiscal cliff negotiations US stocks advanced over the week. Gains on Friday, however, were meagre with the S&P 500 and the Dow Jones indices closing relatively flat. At odds with the positive mood of equities, the CBOE Volatility Index (VIX), Wall Street’s fear gauge, jumped 5.4% although it has declined 14.7% in November. Among rising stocks, Advanced Micro Devices (AMD) rose 7.8% following the announcement of a potential sale of its campus, which would generate much needed cash.

Signs of a reviving Chinese economy, as the official manufacturing purchasing manager’s index rose to a seven-month high, helped Asian shares advance overnight, although factory data elsewhere in Asia was patchy. The best performing bourse was Australia (up 0.6%), helped by hopes of a rate cut on Tuesday. European stock markets are up in early trade on Monday (FTSE Eurofirst 300 and FTSE 100 both up 0.3% at the time of writing). This morning Greece announced the terms of its bond buy-back plan, where it will buy €10 billion of its own debt as part of efforts to meet the conditions set for the release of the next tranche of aid.