* European PMIs trump poor Chinese PMI
* Volkswagen (XETRA:VOWG) shares rebound
* Platinum sinks to lowest since 2009
By Jamie McGeever
LONDON, Sept 23 (Reuters) - European shares rose on
Wednesday after business activity data pointed to steady growth
across the continent, contrasting starkly with figures that
showed the biggest contraction in China's manufacturing sector
since the global financial crisis.
The Chinese purchasing managers index intensified fears that
a slowdown in the world's second-largest economy will spread
more widely, hitting Asian markets, but those fears were later
allayed by the European PMIs.
A recovery in the shares of scandal-hit Volkswagen, which
had lost more than a third of their value in the first two days
of this week, also spurred the recovery in European shares.
S&P mini futures ESc1 pointed to a higher open on Wall
Street.
"Headwinds from the emerging market turmoil are not
derailing the euro zone recovery," said Marco Valli, chief euro
zone economist at Unicredit (MILAN:CRDI).
"While weakness in world trade is unlikely to be reversed
soon - the latest news from China points to a further loss of
momentum there - the euro zone continues to benefit from past
euro depreciation and the recovery in domestic demand," he said.
At midday in Europe the FTSEuroFirst index of leading 300
European shares .FTEU3 was up 0.6 percent at 1,373 points,
Germany's DAX .GDAXI and France's CAC 40 .FCHI were up 0.7
percent, and Britain's FTSE 100 .FTSE was up 1.4 percent.
Volkswagen AG VOWG_p.DE was in the spotlight again after
the company said a scandal over falsified U.S. vehicle emission
tests could affect 11 million of its cars around the globe as
investigations of its diesel models multiplied, heaping fresh
pressure on CEO Martin Winterkorn. ID:nL5N11S052
The share price fell as much as 8 percent early on Wednesday
before rebounding to trade 3 percent higher. It plunged 37
percent over Monday and Tuesday.
Asian stocks, however, posted their biggest single-day fall
in a month, with MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS down 2.3 percent, its biggest
daily loss since Aug. 24, according to Thomson Reuters data.
The MSCI world index was down 0.1 percent .MIWD00000PUS ,
marking the fourth consecutive daily loss.
VW SCANDAL SINKS PLATINUM
The preliminary Caixin/Markit China Manufacturing Purchasing
Managers' Index (PMI) fell to its worst level since March 2009.
ID:nL4N11T2OW
"The decline was driven by a fall in new orders and new
export orders. Falling demand both domestically and abroad is
only going to make the task of achieving 7 percent growth that
much harder," said Craig Erlam, senior market analyst at Oanda
in London.
The Chinese data came after the U.S. central bank refrained
from lifting interest rates for the first time in nearly a
decade last week, citing concerns that global problems, and
China in particular, may hurt the U.S. recovery.
However, the resilience of European stocks cooled overnight
demand for safe-haven fixed-income assets.
The benchmark two-year U.S. Treasury yield US2YT=RR edged
up to 0.7 percent, and the yield on the 10-year U.S. bond rose 3
basis points to 2.16 percent US10YT=RR .
Yields on benchmark German bonds also rose as much as 3
basis points. EU2YT=RR EU10YT=RR
The positive reaction in Europe to the PMIs helped the euro
to rise a third of one percent to $1.1160 EUR= . The dollar was
little changed against the yen at 120.20 yen JPY= .
In emerging markets, Brazil's real languished at a record
low against the dollar, having fallen through the 4 per dollar
level on Tuesday for the first time ever. BRL= . It has now
lost around 35 percent this year.
In commodities U.S. crude futures CLc1 rose 0.7 percent to
$46.70 per barrel, while Brent futures LCOc1 rose 0.5 percent
firmer to $49.35.
Copper CMCU3 recovered in European trading from near
four-week lows overnight in Asia. It was last up 0.5 percent
having earlier posted its biggest one-day drop in more than two
months as fund and speculative selling pushed prices down
following the Chinese PMI report.
Platinum XPT= slid to a fresh 6-1/2-year low on fears
about reduced demand from the auto sector, where it is used in
diesel catalysts to clean up exhaust emissions.
It fell to its lowest since January 2009 at $925.30 an
ounce, before recouping some losses to trade up 0.3 percent at
$937.20.
The metal has been hurt by news of Volkswagen's
falsification of U.S. vehicle emission tests as investors
believed it could affect demand for diesel cars. ID:nL1N11S21N