Markets lack momentum in thin holiday trading

A woman and a child walk in front of the electronic stock board of a securities firm in Tokyo, Japan, Tuesday, May 1, 2012. Japan's Nikkei 225 fell Tuesday amid a stronger yen and signs of a slowing U.S. economy, while other key Asian stock indexes were closed for a public holiday. (AP Photo/Itsuo Inouye)

A woman and a child walk in front of the electronic stock board of a securities firm in Tokyo, Japan, Tuesday, May 1, 2012. Japan's Nikkei 225 fell Tuesday amid a stronger yen and signs of a slowing U.S. economy, while other key Asian stock indexes were closed for a public holiday. (AP Photo/Itsuo Inouye)

A trader works at a foreign exchange market, where the U.S. dollar is traded at 79.82 yen in Tokyo, Japan, Tuesday, May 1, 2012. The Nikkei Stock Average in Tokyo fell 1 percent to 9,422.83. Export shares struggled as the dollar hovered below the 80-yen mark. The greenback hasn't been this weak against the Japanese currency since February.(AP Photo/Itsuo Inouye)

LONDON (AP) ? Global markets mostly edged higher on Tuesday on signs that Chinese manufacturing continues to grow, though trading volumes were thin due to a holiday in much of Europe and Asia.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers' index, or PMI, rose to 53.3 in April from March's 53.1. A reading above 50 signifies expansion.

Although analysts had expected to see an improvement to 53.6, it was the fifth-straight monthly gain and the highest level in a year, noted Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.

"The message is that Chinese manufacturing is growing," he wrote in a report. "The risk of hard landing remains manageable and became a bit more remote. This should be positive for sentiment in Asia and globally."

Investors will look to a similar survey in the U.S., the manufacturing ISM report, later in the day for more clues on the health of the recovery in the world's largest economy.

While the survey is expected to show a modest slowdown in activity, it will be scrutinized for any signs that companies are hiring more. That will be key to shaping market expectations of the main U.S. jobs indicator, the non-farm payrolls, due Friday.

Though most European indexes were closed, Britain's FTSE remained open and was up 0.2 percent to 5,751.27 by midday in London. Better-than-expected earnings from Lloyds Banking Group helped financial stocks, though BP PLC shares dropped after it reported a decline in profits.

Also limiting gains in London was a drop in the U.K.'s own manufacturing survey, which showed a slowdown. Britain has fallen into a new recession, though its depth and duration remain uncertain as domestic demand and industrial activity remain relatively weak.

Wall Street appeared headed for a subdued opening, with Dow Jones industrial futures 0.1 percent higher at 13,161 and S&P 500 futures down 0.1 percent to 1,392.50.

Besides the U.S. economic indicators, investors will keep an eye on developments in Europe's debt crisis, which continues to cloud prospects for a global economic recovery.

The Spanish government said Monday that its economy ? the fourth-largest in the 17-nation eurozone ? shrank in the first three months of 2011, putting it back into recession.

Traders are worried Spain may need a bailout if it is unable to cut its budget deficit enough or has to save its banking sector, which is saddled with bad loans from an imploded property market.

Also on the horizon are elections in France and Greece.

In France, polls suggest a victory for Socialist contender Francois Hollande, who wants to renegotiate a European treaty intended to limit excessive government spending to emphasize growth over austerity. Some investors fear Hollande could upset France's delicate cooperation with Germany, which has been critical to Europe's efforts to resolve its financial crisis.

In Greece, no one party is expected to win a majority to create a government. Investors are hoping a coalition of the two main parties, which have agreed to the country's bailout terms, will win enough support to create another coalition government.

In Asia, the Nikkei Stock Average in Tokyo slid 1.8 percent to close at 9,350.95, hurt by the higher yen.

Australia's S&P/ASX 200 rose 0.8 percent to 4,429.50, after the Reserve Bank of Australia cut its benchmark interest rate by half a percentage point to 3.75 percent in a move aimed at stimulating the economy.

Benchmarks in New Zealand and Indonesia also rose. Markets in China, South Korea, India, Singapore, Taiwan and Indonesia were among those closed for public holidays.

In currency trading, the euro rose to $1.3251 from $1.3243 late Monday in New York while the dollar rose to 79.89 yen from 79.81 yen.

Benchmark oil for June delivery fell 22 cents to $104.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 6 cents to end at $104.87 per barrel on the Nymex on Tuesday.

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Pamela Sampson in Bangkok contributed to this report.

Associated Press

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