Advert

European stocks, euro higher on Chinese data

European stock markets and the euro rose yesterday as traders welcomed strong Chinese manufacturing data and an Israel-Gaza truce, while a Greek bailout deal was put on hold ahead of an EU summit.

Investors shrugged off news that Cyprus, currently holding the rotating EU presidency, will probably need €17 billion in international aid to rescue its struggling economy, hit by recession and the Greek debt crisis.

The benchmark FTSE 100 index climbed 0.68 per cent to close at 5,791.03 points in London, Frankfurt’s DAX 30 gained 0.84 per cent to 7,244.99 points and the Paris CAC 40 advanced by 0.60 per cent to 3,498.22.

The euro jumped to $1.2875 from $1.2826 late in New York on Wednesday.

On the London Bullion Market, gold prices rose to $1,731 an ounce from $1,724 on Wednesday. US markets were shut for the Thanksgiving holiday, resulting in quieter activity.

“European markets have been inspired by the uplifting PMI data from China,” said Gekko Global Markets trader Anita Paluch.

Rabobank foreign exchange analyst Jane Foley added: “Better Chinese PMI data, a ceasefire between Hamas and Israel and comments from (German) Chancellor (Angela) Merkel suggesting that an agreement that will release bailout funds to Greece could still be brokered on Monday are all supporting a modest ‘risk on’ tone.”

The HSBC bank said China’s manufacturing activity grew for the first time in more than a year in November, reinforcing recent views that the world’s second biggest economy is beginning to pick up after several months of slowdown.

HSBC’s purchasing managers’ index (PMI) stood at 50.4 this month, compared with 49.5 in October.

Anything above 50 points to growth and anything below indicates contraction.

It was the first reading above 50 since October 2011 and added to a slew of upbeat trade, investment and sales figures that have fuelled market optimism.

“A 13-month high for HSBC’s Chinese Flash PMI is always going to give a leg up to London’s resource-heavy (stock) market, and helps us overlook continuing weakness in equivalent eurozone numbers,” IG trader Will Hedden commented.

In Brussels, meanwhile, European Union leaders braced for what could be a gruelling summit on a trillion-euro EU budget that has bitterly divided a 27-nation bloc already mired in economic crisis.

On the eve of the summit, eurozone finance chiefs failed to strike a deal to unlock the latest bailout payment for indebted Greece, causing them to meet again on Monday.

In Nicosia, Cyprus Finance Minister Vassos Shiarly told media the country needs €17 billion in aid to cover a four-year period through 2016, while President Demetris Christofias said it was close to agreement on a bailout with international lenders.

European traders were lifted by the announcement of a Middle East truce that ended eight days of bloodshed in Gaza and Israel and left both sides claiming victory.

On the corporate front, shares in British brewer SABMiller rallied 6.38 per cent to 2,801 pence after the maker of Grolsch and Miller Lite reported a 15 per cent rise in half-year profits to $1.59 billion (€1.23 billion). (AFP)

Advert

Comments are submitted under the express understanding and condition that the editor may, and is authorised to, disclose any/all of the above personal information to any person or entity requesting the information for the purposes of legal action on grounds that such person or entity is aggrieved by any comment so submitted.

At this time your comment will not be displayed immediately upon posting. Please allow some time for your comment to be moderated before it is displayed.

For more details please see our Comments Policy

Comments not loading? We recommend using Google Chrome or Mozilla Firefox with javascript turned on.
Comments powered by Disqus
Advert
Advert