Markets

European Stocks Close Higher On Stimulus Hopes

(RTTNews) - European markets closed higher on Wednesday amid hopes the central banks will announce additional stimulus sooner than later to boost economic recovery.

Investors reacted positively to Federal Reserve Chairman Jerome Powell's comments reiterating the central bank's commitment to use all of its monetary policy tools for as long as necessary to support the economy.

Investors shrugged off flash survey data from IHS Markit showing that the euro area private sector stagnated in September. Encouraging France factory data aided sentiment a bit.

The euro area composite output index declined to 50.1 in September from 51.9 in August. Economists had forecast the reading to drop to 51.7.

Manufacturing output growth accelerated in September to the fastest since February 2018, while services recorded the largest contraction of output since May.

The French private sector contracted in September, survey results from IHS Markit showed. The flash composite output index declined unexpectedly to 48.5 from 51.6 in August.

Germany's private sector continued to expand in September, albeit at a slower pace. IHS Markit's composite output index dropped more-than-expected to 53.7 in September from 54.4 in August.

Meanwhile, the manufacturing PMI rose to a 26-month high of 56.6 from 52.2 in August. Economists had forecast the index to climb to 52.5.

Elsewhere in the U.K., the IHS Markit/CIPS flash composite Purchasing Managers' Index (PMI) dropped to a three-month low of 55.7 after hitting a six-year high of 59.1 in the previous month.

The pan European Stoxx 600 advanced 0.55%. The U.K.'s FTSE 100 gained climbed 1.2%, Germany's DAX added 0.39% and France's CAC 40 gained 0.62%, while Switzerland's SMI declined 0.25%.

Among other markets in Europe, Denmark, Ireland, Netherlands, Norway, Russia, Spain, Sweden and Turkey closed higher.

Austria, Belgium, Czech Republic, Greece, Iceland, Poland and Portugal declined, while Finland ended flat.

In the UK market, Ds Smith, JD Sports Fashion, Flutter Entertainment, Melrose, Smith & Nephew, Ferguson, Royal Bank, M&G and Prudential gained 3 to 4%.

Standard Chartered, AstraZeneca, British American Tobacco, Kingfisher, Aviva and 3i Group also rose sharply.

Among the losers, Fresnillo declined more than 5.5%. IAG, BP and Antofagasta shed 1 to 1.75%.

In the German market, Wirecard spurted nearly 7.5%. Adidas gained over 4%, RWE moved up 3.1%, while Bayer, Continental, Deutsche Post, Lufthansa and Henkel gained 1.5 to 2%.

Allianz, Thyssenkrupp and Siemens ended notably lower.

In France, Peugeot gained about 2% after the automaker said it would buy back 10 million of its own shares from Dongfeng Motors. Renault surged 4.7%.

Accor, Renault, Valeo, Sanofi, LVMH and Technip also ended sharply higher, while Unibail Rodamco, Safran and BNP Paribas lost 2.3 to 3.3%.

Shares of Austrian sensor maker AMS rose sharply after the company said it had entered into a domination and profit and loss transfer agreement with German firm Osram Licht. Shares of the latter jumped about 15%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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