European stocks shrug off China data Monday 09:00 BST. A burst of buying at the European open has turned an initially cautious start to the quarter into a distinctly more positive one as traders dismiss a slew of data highlighting the weak state of the global economy. The FTSE All-World equity index is up 0.1 per cent as the FTSE Eurofirst 300 turns an early loss into a 0.8 per cent gain and Wall Street's S&P 500 futures point to a 0.3 per cent pop for New York later in the day. Away from equities the mood is more circumspect, however, but still generally, if mildly, "risk on." The dollar index is down 0.1 per cent, pushing gold up $1 to $1,771 an ounce. Treasuries are becalmed, leaving yields at 1.63 per cent, though the broadly more optimistic tone sees Bund yields gain 5 basis points to 1.47 per cent. Commodities are struggling to join in the bullish move, with copper shedding 0.6 per cent to $3.74 a pound and Brent crude losing 25 cents to $112.18 a barrel. This leaves commodity-sensitive currencies under pressure, forcing the Australian dollar down 0.1 per cent to $1.0368. The advance for stocks continues the "risk asset" rally enjoyed by the bulls for much of the past four months. This was primarily based on easing eurozone debt tensions and an understanding that several global central banks were delivering another round of liquidity injections - pledged, though not yet triggered, in the case of the European Central Bank. Such worries were initially colouring trading again on Monday after a set of dour data from Asia. But it seems that fund managers were minded to put money to work at the start of the fourth quarter and not even surveys pointing to a European recession could cool their ardour. Dealing has been thinned by a number of countries taking holidays - China is off all week, Hong Kong for Monday and Tuesday, and South Korea Monday then Wednesday - and this has left Japan to bear the brunt of selling in the region. Next came surveys of the eurozone manufacturing sector. "Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September," said Chris Williamson, chief economist at Markit, which collected the data. Traders must have been expecting worse, because Germany's Dax index is up 1.1 per cent and the euro has recovered early losses to gain 0.1 per cent to $1.2867. European investors have also got their first chance to react to the details of the Spanish bank audit, released last Friday The top-line figure of a €59bn capital shortfall was in line with market expectations, reducing fears about the wider regional financial sector. The FTSE Eurofirst banking sub-index is up 1 per cent. Spanish two-year yields are down 3 basis points to 3.39 per cent - they were above 7 per cent in July - as the market waits to see whether Madrid will request a full sovereign bailout. Given that he has only recently announced open-ended QE3, he is not expected to deliver any significant new policy clues, though comments on the forthcoming "fiscal cliff" may perhaps make an appearance to pique investors" interest.