(AP) -- Asian stock markets were rattled Friday by a further deterioration in Chinese manufacturing and cautious earnings outlooks from U.S. companies. European benchmarks rose as talks began in Athens for Greece's bailout.
KEEPING SCORE: Germany's DAX rose 0.1 percent to 11,523.95 and France's CAC 40 added 0.5 percent to 5,113.59. Britain's FTSE 100 gained 0.4 percent to 6,679.31. Futures pointed to gains on Wall Street after three days of losses. Dow futures were up 0.2 percent. S&P 500 futures gained 0.2 percent. Earlier in Asia, Japan's Nikkei 225 fell 0.7 percent to 20,544.53 and Hong Kong's Hang Seng shed 1.1 percent to 25,128.51. Australia's S&P/ASX 200 fell 0.4 percent to 5,566.10. China's Shanghai Composite Index sank 1.3 percent to 4,070.91.
CHINA WEAKNESS: China's manufacturing slumped to a 15-month low in July in a fresh sign of deterioration in the world's second biggest economy. The Caixin/Markit manufacturing index based on a survey of factory purchasing managers fell to 48.2 this month from 49.4 in June. It uses a 100-point scale on which numbers above 50 indicate expansion. Employment in China's giant manufacturing industry, which employs tens of millions of people, continued to shrink.
GREECE TALKS: Discussions over Greece's third bailout in five years are set to begin in Athens imminently after Greece's parliament approved tough new conditions set by European creditors. Officials in Athens and at the European Union said negotiators are expected to start arriving on Friday, marking the first time high-level talks will be held in the Greek capital since Prime Minister Alexis Tsipras' left-wing government assumed power in late January.
FED WATCH: Investors are expecting the U.S. Federal Reserve to raise interest rates for the first time since the global financial crisis though views are split on whether that will happen in September or December. Ultra low interest rates have been a boon for stock markets worldwide for several years and the start of US rate hikes is likely to ruffle markets. The Federal Reserve Open Market Committee has a two-day policy meeting next week.
THE QUOTE: "While almost no one is expecting the Fed to raise interest rate in the July meeting, everyone is watching for their comments, particularly on the economic and inflation outlook," said Bernard Aw, market strategist at IG in Singapore. "We hold on to our belief that there will be interest rate increase this year as long as we don't see a derailment in the trajectory of the US economy."
EARNINGS DISMAY: American companies have mostly reported better-than-anticipated quarterly profits since the start of the month, but many have fallen short when it comes to revenue. Others have issued cautious outlooks, citing the strength of the dollar, a slowing economy in China or falling oil prices. That's giving investors reason to pause.
ENERGY: Benchmark U.S. crude was up 25 cents at $48.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 74 cents to close at $48.45 a barrel in New York on Thursday. International benchmark Brent crude was down 13 cents at $55.14 a barrel on the ICE futures exchange in London.
CURRENCIES: The euro fell to $1.0936 from $1.0985 on Thursday. The dollar rose to 123.97 yen from 123.88 yen.