Asia and European stocks mostly rise despite Wall Street losses

LONDON: Asian and European markets mostly rose Wednesday after forecast-beating Chinese factory data raised hopes for the world's number two economy, but gains were limited following a soft lead from Wall Street.

The London stock market also forged higher as the British pound dipped on a shock new opinion poll ahead of next week's June 8 general election.

China said Wednesday that its purchasing managers' index of manufacturing activity held up in May, beating expectations for a decline.

The reading indicated the sector continues to grow and suggests the economy is feeling the benefits of a pick-up in global demand.

China's growth slowed to its weakest level in a quarter of a century in 2016. It is expected to ease this year as leaders try to address huge debt piles and switch from trade and investment to consumer demand as the driver of expansion.

"More compelling economic data came out of China, the manufacturing sector expanded more than expected in May, and provided much comfort to investors about the health of the second biggest economy in the world," noted analyst Naeem Aslam at trading firm Think Markets.

Shanghai, which was closed Monday and Tuesday for a holiday, ended up 0.2 percent, Sydney added 0.1 percent and Seoul was 0.2 percent higher. Singapore put on 0.2 percent and Jakarta gained 0.2 percent.

However, Tokyo ended 0.1 percent lower and Hong Kong shed 0.2 percent after a one-day break.

- Weak pound lifts London -

Meanwhile, British Prime Minister Theresa May was fighting Wednesday to shore up her election campaign after a shock projection by pollsters YouGov forecast a hung parliament in which the Conservatives would fall short of the 326 seats needed for a majority.

The Conservatives would lose 20 seats to 310, with Jeremy Corbyn's main opposition Labour party up 28 to 257 seats, according to YouGov.

"The FTSE is trading in the green ... as the continued uncertainty surrounding next week's snap election is dragging the pound sharply lower," said IG analyst Joshua Mahony.

"Recent polls have clearly been moving in favour of often maligned Jeremy Corbyn, with the latest YouGov survey pointing towards a distinct chance that we could see the Tories fail to maintain an outright majority."

Sterling had risen in recent weeks on the prospect that May would win a landslide in the June 8 poll, giving her a stronger hand in Brexit talks.

However, the currency has fallen with the government's poll numbers on fears Britain could end up with a bad EU exit deal.

Across the Atlantic, Wall Street weakened Tuesday as US inflation remained soft in April despite a modest increase, while consumer confidence slipped.

The readings come days before the release Friday of closely watched US jobs data, which is used as a guide for the Federal Reserve's plans for interest rate rises.