Markets

European Stocks Close Sharply Higher As Upbeat Economic Data Lifts Sentiment

(RTTNews) - European stocks closed on a buoyant note on Monday as encouraging data from Eurozone, China and the U.K. helped ease worries about global economic recovery and triggered hectic buying almost across the board.

It was a weak start for most of the markets, including the major ones, as worries about spikes in coronavirus cases and fears of fresh lockdown measures hurt sentiment. However, stocks recovered gradually and kept edging higher as the day progressed to eventually close on an upbeat note.

The pan European Stoxx 600 surged up 2.05%. The U.K.'s FTSE 100 climbed 2.29%, Germany's DAX jumped 2.71%, France's CAC 40 rose 1.93% and Switzerland's SMI ended stronger by 2.24%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Ireland, Netherlands, Norway, Portugal, Spain and Sweden ended on a high note, with their benchmarks gaining 1 to 2.3%.

Iceland and Russia posted moderate gains. Poland edged up marginally, while Greece and Turkey closed weak.

In the U.K. market, Lloyds Banking Group shares climbed more than 6%. Smurfit Kappa Group gained 5.3%, WPP, Intertek Group, Prudential, Hargreaves Lansdown, CRH, Aveva Group, Ocado Group, Antofagasta, Rio Tinto, Ashtead Group and Aviva gained 4 to 4.6%.

Melrose, DCC, Barclays, Standard Life, Hikma Pharmaceutical, Ferguson and Scottish Mortgage also rose sharply.

HSBC Holdings shares tumbled 2.85% after the bank reported a 65% drop in first-half earnings. Carnival and Hiscox both ended lower by about 3.4%.

In France, Vivendi surged up nearly 6.5%. Engie gained 5.4%, Technip, Saint Gobain, Renault and Bouygues ended stronger by 4.4 to 5%.

Vinci, Publicis Groupe, BNP Paribas, Schneider Electric, STMicroElectronics, Credit Agricole, ArcelorMittal, Airbus Group, Michelin, Peugeot, Air Liquide, Worldline and Sanofi gained 2 to 4%.

Unibail Rodamco lost more than 6%. L'Oreal and Essilor lost 1.7% and 1.5%, respectively. Societe Generale ended 0.6% down after reporting a net loss of Euro 1.26 billion in the second-quarter.

In the German market, Volkswagen, Daimler and Munich RE gained 4.2 to 5%. Bayer, Continental, Merck, Siemens, BASF, Deutsche Bank, Deutsch Post, Allianz, Covestro, SAP, BMW, HeidelbergCement, Vonovia, Adidas, Deutsche Telecom, Thyssenkrupp and Fresenius Medical Care moved up 2 to 4%, while Lufthansa declined more than 3%.

In economic news, a private survey showed China's factory activity expanded at the fastest pace decade in July, helping ease worries about the Covid-19 pandemic on the global economy. The Caixin manufacturing Purchasing Managers' Index rose to 52.8 in July from 51.2 in June.

The euro area manufacturing sector returned to growth in July for the first time in a year-and-a-half as output and demand continued to recover with the further easing of restrictions related to the coronavirus disease, final data from IHS Markit showed.

The manufacturing Purchasing Managers' Index rose to 51.8 in July from 47.4 in June. This was also above the flash reading of 51.1. Both production and new orders returned to growth in July. The marked expansion in output was registered for the first time since the start of 2019 and the growth in new orders was the strongest since early 2018.

The UK manufacturing sector expanded the most in more than a year in July as output growth hit a 32-month high due to further loosening of the lockdown conditions in place due to the coronavirus disease, final data from IHS Markit showed Monday.

The IHS Markit/Chartered Institute of Procurement & Supply final manufacturing Purchasing Managers' Index rose to a 16-month high of 53.3 in July from 50.1 in June. However, this was below the flash estimate of 53.6.

Switzerland's consumer prices declined for the sixth month in a row in July, though at a softer rate, data from the Federal Statistical Office showed. The consumer price index decreased 0.9% year-on-year in July, following a 1.3% decline in June. Economists had expected a 1.1% fall. .

On a monthly basis, consumer prices fell 0.2% in July. Economists forecast a 0.4% decline.

The core CPI fell 0.4 percent annually in July and declined 0.2% from the previous month. The EU measure of harmonized index of consumer prices rose 0.1% monthly in July and declined 1.2% from the previous year.

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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