Business

Eu Inventory Markets Prolong Restoration

European stock markets rallied Wednesday following overnight gains in the US and a mixed Asian performance, as traders downplayed data showing expected slowdowns to economic recovery.

Business activity in the eurozone and Britain stagnated in September as a summer recovery faltered owing to rising cases of the coronavirus, IHS Markit said.

For the euro-currency bloc, the purchasing manager’s index (PMI) fell to 50.1 points from 51.9 points in August, barely above the 50-point level that indicates growth.

The UK level dropped to 55.7 from 59.1.

“PMIs underline the fragility of the recovery,” said Neil Wilson, chief market analyst at Markets.com.

“The manufacturing sector can sustain a recovery as firms can work out how to function in the new environment, but it’s harder for many service sector businesses to operate at all, which drags on the number,” he added.

In Washington, Fed boss Jerome Powell warned lawmakers that the world’s top economy would see a slower recovery should they not push ahead with a fresh rescue package, noting that stimulus cheques and expanded unemployment payments moderated the impact of the virus earlier this year.

British Prime Minister Boris Johnson has unveiled new measures meanwhile that will force English pubs and other hospitality venues to close at 10 pm, and halted a planned phased return of fans to live sporting events.

In afternoon European trade, London’s benchmark FTSE 100 shares index was up by 2.0 percent, but showing signs of losing steam.

In the eurozone, Frankfurt’s DAX 30 gained 1.2 percent and the Paris CAC 40 added 1.4 percent.

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As trading began in New York, the Dow Jones index showed a gain of 0.5 percent

The euro dropped to near a two-month low under $1.17.

Oil prices climbed as traders waited for crude stockpiles data from the United States, a key indicator of demand.

“European equities have been taking their cues from the US a lot recently so the strong gains that were racked up in the US tech sector (Tuesday) have encouraged the bulls,” noted David Madden, analyst at CMC Markets UK.

Asian investors struggled to match their Wall Street counterparts Wednesday, with markets mixed as spiking infection rates, new containment measures and still no US stimulus fuel concerns about economic recovery.

Following a global rally since March’s nadir, gloom descended on equities markets this month, with uncertainty leading into November’s presidential election and ongoing China-US tensions adding to the mix.

London – FTSE 100: UP 2.0 percent at 5,944.47 points

Frankfurt – DAX 30: UP 1.2 percent at 12,746.05

Paris – CAC 40: UP 1.4 percent at 4,840.36

EURO STOXX 50: UP 1.3 percent at 3,205.06

New York – Dow Jones: UP 0.5 percent at 27,431.97

Tokyo – Nikkei 225: DOWN 0.1 percent at 23,346.49 (close)

Hong Kong – Hang Seng: UP 0.1 percent at 23,742.51 (close)

Shanghai – Composite: UP 0.2 percent at 3,279.71 (close)

Euro/dollar: DOWN at $1.1697 from $1.1707 at 2120 GMT

Pound/dollar: UP at $1.2747 from $1.2729

Euro/pound: DOWN at 91.75 pence from 91.96 pence

Dollar/yen: UP at 105.14 yen from 104.92 yen

West Texas Intermediate: UP 0.6 percent at $40.02 per barrel

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Brent North Sea crude: UP 0.5 percent at $41.94 per barrel


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