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US PMI data incites cautious optimism

The better than expected manufacturing data of the US positively affected the global markets. Oil prices are at a three months’ high and the data also suggest that though the US economy‘s economy’s growth may be slowing, but it is not at risk. However some analysts and investors are still wary.

Global stock markets welcomed Monday’s news on that the US manufacturing sector grew unexpectedly last month for a 12th straight month. Japanese stocks climbed for the second day in a row and other Asian stocks rose to their highest level in three months, Reuters reports.

In addition, oil prices also jumped to their highest in three months to above $80 per barrel but investors are careful after the sharp uptick. “We moved up too far, too fast yesterday and we are now settling," said Christophe Barret, global oil analyst at Credit Agricole. “I expect we will go back into the $75 to $80 range because fundamentals don't support the recent rise,” Reuters cited him.

The oil sector is not the only one which worries investors. Experts are also concerned by the manufacturing sector which may be growing too fast. “The manufacturing sector has clearly lost some steam over the past two months. The pressing question is whether this reflects a temporary hiccup or the beginning of something more persistent,” the Sydney Morning Herald cited an analyst at Pierpont Securities.

Some dealers said the market may be setting itself up for a fall, the British Guardian reports, and also cited worried economy analysts. “Even though I believe that we are setting up for a correction of epic proportions, we still have to respect the market's movement and its blind ambition,” said Phil Flynn of Alaron Trading in the US. (BBJ)