US markets start 2019 on muted note

US shares rebounded from steep early losses on Wednesday, lifted in part by energy companies.

The three leading market indexes opened down more than 1%, following reports of weaker than expected manufacturing activity in China.

But the indexes later rallied. The Dow Jones and S&P 500 closed up about 0.1%, while the Nasdaq gained about 0.5%.

European markets followed a similar path. In London, the FTSE 100 closed up about 0.1%.

ExxonMobil and Chevron were some of the day's top gainers on the Dow, following reports suggesting Saudi Arabia was taking steps to cut oil supply.

London's 100 share index performance 2018

After a rough-and-tumble 2018 - which saw some of the steepest declines on global stock markets since the financial crisis - the outlook for financial markets this year is mixed.

Analysts expect economic slowdowns in key countries in 2019, including China and the US, fuelling investor angst.

Political questions, including over Brexit and US President Donald Trump's trade battles with China and Europe, have added to those fears.

Central banks are also shifting away from the fiscal stimulus that has kept the cost of borrowing low in the years after the financial crisis.

On Wednesday, the most immediate cause for concern were new figures that showed activity in China's manufacturing sector contracted in December for the first time in more than two years.

Manufacturing activity in the US also shrank.

The shutdown of the US government, triggered by Mr Trump's standoff with Congress over funding for a wall along the Mexican border, has also added to concerns.

Still some analysts have said the sell-off that hit financial markets in recent months overstates the concerns.

In remarks to reporters on Wednesday, Mr Trump - a frequent cheerleader for rising US stocks - suggested he shared that view, calling the recent declines a "little glitch".

"It's going to go up once we settle trade issues, and once a couple of other things happen," he predicted.

On Wednesday, the Dow gained about 18.8 points to end at 23,346.24.

The wider S&P 500 added about 3 points, closing at 2,510.01 while the Nasdaq climbed about 30.7 points, ending at 6,665.94.