Commodities: Weak Chinese factory PMI dampens sentiment

Commodities traded lower on Thursday for the most part, following the release of a weaker-than-expected reading on Chinese manufacturing sector conditions, although the latest US data did surprise to the upside.

Overnight, the official Chinese manufacturing sector Purchasing Managers' Index slipped from a reading of 49.5 for January to 49.2 in February, contrary to expectations for an unchanged reading.

Among the PMI's subindices, export orders fell further below the 50.0 point mark, alongside a "nasty" fall in a gauge of import orders, with the latter "suggesting no end in sight to the global manufacturing slowdown," said Freya Beamish at Pantheon Macroeconomics.

Against that backdrop, West Texas Intermediate crude oil futures for April delivery edged up by 0.53% on NYMEX to reach $57.24 a barrel, even as similarly-dated Brent drifted lower by 0.54% to $66.03.

Precious metals were also moving lower, weighed down by an apparent easing in tensions along the Line of Control in the disputed region of Kashmir.

And while the US-North Korea summit was abruptly halted on Wednesday evening, with no apparent deal, it later emerged that some progress was made, although Washington had reportedly balked at Pyongyang's bid for the complete removal of American sanctions.

Combined, the geopolitical news saw April gold on COMEX slip 0.42% to $1,315.60/oz..

In the background, the US dollar spot index was also holding its own, reversing early losses to trade nearly unchanged after the US Commerce Department reported stronger-than-expected GDP growth for the fourth quarter of 2.6% (consensus:2.3%).

But the heaviest selling was seen in grains, with May wheat on CBoT erasing 1.55% to $4.5950 a bushel.