European Markets Climbed On Chinese Manufacturing Data
(RTTNews.com) - The European markets bounced back from the weakness of the prior session on Thursday, finishing in positive territory. Investor sentiment received a boost from the stronger than expected Chinese manufacturing data. The private sector data reported by the Eurozone also signaled continued growth. Investors also continue to monitor a number of earnings reports from both Europe and the United States.
China's manufacturing growth hit a seven-month high in October, adding to evidence that the recovery is gaining strength after the slowdown witnessed in the first half of the year.
The flash manufacturing Purchasing Managers' Index rose more-than-expected to 50.9 in October from 50.2 in September, a survey conducted by HSBC and Markit Economics between October 11 and 22 showed Thursday. The reading exceeded the expected score of 50.4.
Eurozone firms that are delaying the changeover to a new payment system risk disruptions, European Central Bank Executive Board member Benoit Coeure said Thursday.
The deadline for euro area countries to migrate to the Single Euro Payments Area (SEPA) credit transfer and direct debit schemes is set at February 1, 2014. The SEPA initiative aims to overcome technical, legal and market barriers between countries in order to create a single market for retail payments in euro.
Thirty-three countries in Europe will participate in SEPA. With only 100 days left to go, the changeover process is now entering a critical phase, the central bank said.
Cyprus' central bank governor has come under severe pressure to resign after allegations that the bank agreed to pay an international audit firm a fee of nearly EUR 5 million, which is based on the amount needed to recapitalize banks.
The Cypriot daily the Cyprus Mail reported on Wednesday that Governor Panicos Demetriades agreed with the auditing firm Alvarez & Marsal to pay a 0.10 percent commission on the amount needed to recapitalize banks and this included the depositors' money.
The firm called this a 'success fee', which was in addition to its standard fees, according to media reports. The bank had sought the services of the firm while trying to secure an international bailout deal early this year.
The legal opinion of the central bank's external counsel was that the compensation of such a fee [success fee] cannot be justified based on the terms of the contract, the Central Bank of Cyprus said in a statement on Wednesday.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.64 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.43 percent.
The DAX of Germany climbed by 0.68 percent and the CAC 40 of France advanced by 0.35 percent. The FTSE 100 of the U.K. rose by 0.58 percent and the SMI of Switzerland gained 0.23 percent.
In Frankfurt, Software AG increased by 4.54 percent. The business infrastructure software firm confirmed its earnings forecast for 2013 despite posting lower income of 31.1 million euros for the third quarter compared with 40.7 million euros last year.
Daimler climbed by 3.29 percent. The automaker reported third-quarter profit of 1.84 billion euros, up from 1.13 billion euros last year, driven by growth in unit sales, particularly Mercedes-Benz. Looking ahead, the company said it expects EBIT from ongoing business of around 7.5 billion euros for the full year.
Celesio jumped by 5.41 percent, after McKesson offered to acquire it for 6.1 billion euros.
In London, Shire surged by 9.31 percent. The pharmaceutical company increased its full year 2013 guidance.
Aberdeen Asset Management rose by 5.83 percent. The company confirmed that it is involved in discussions to acquire Scottish Widows Investment Partnership from Lloyds Banking. Lloyds Banking finished with a gain of 2.84 percent.
WPP closed higher by 0.91 percent, after its third quarter report.
Rolls-Royce gained 2.62 percent, after it signed a contract valued at 22 million pounds.
ABB advanced by 4.96 percent in Zurich. The engineering firm posted higher profit and revenues for the third quarter, thanks to strong performance in the U.S. and an improvement in Europe.
Credit Suisse decreased by 2.82 percent, after reporting third-quarter earnings below estimates.
Ericsson AB sank by 5.34 percent in Stockholm. The telecom firm reported a jump in the third-quarter profit, but net sales dropped unexpectedly, hurt by currency impacts and lower sales in North East Asia and India.
Banco Santander rose by 0.87 percent in Madrid. The banking products provider reported about 77 percent jump in attributable profit for the nine-month period, reflecting a decline in provisions and write-offs.
Unilever rose by 0.19 percent in Amsterdam. The consumer goods giant reported a decline in third-quarter sales, hurt by negative currency impacts as well as lower results across all its regions and businesses.
Although an indicator of private sector performance in the euro area signaled expansion for the fourth straight month in October, the unexpected decline in the reading mirrors an uneven and fragile recovery.
Due to a slowdown in the expansion of the service sector, the flash composite Purchasing Managers' Index fell to 51.5 from 52.2 in September, preliminary survey results of a survey by Markit Economics showed Thursday. The score was expected to rise to 52.4.
Germany's private sector economy expanded at the slowest pace in three months during October, as the slowdown in services growth offset an improvement in manufacturing, preliminary data from a survey by Markit Economics showed on Thursday. The flash composite output index dropped to a three-month low of 52.6 from 53.2 in September.
The French private sector output was stable at the start of the fourth quarter, flash survey results from Markit Economics showed Thursday. The flash composite output index came in at 50.1 in October, close to the neutral 50-mark. It dropped from a score of 50.5 seen in September.
Confidence among Italian consumers declined more-than-expected in October, after a strong improvement in the previous month, data released by the statistical office ISTAT showed on Thursday.
The consumer confidence indicator fell to 97.3 from a revised 100.8 in September, the weakest print since June. Economists had expected the score to fall to 100.6 from September's original reading of 101.1.
Spanish unemployment declined at a faster-than-expected pace in the third quarter from the previous three months as the economy exited recession that lasted more than two years. The jobless rate dropped to 25.98 percent from 26.26 percent in the second quarter, the statistical office INE said on Thursday. Economists had forecast a figure of 26.1 percent.
Optimism among U.K. manufacturers improved at the fastest rate since April 2010 as orders and output continued to grow steadily in the three months to October, survey data from the Confederation of British Industry showed Thursday.
According to Industrial Trends Survey, around 32 percent of businesses said they were more optimistic about the general business situation than three months ago and 8 percent less, giving a balance of +24 percent, the highest since April 2010.
With the value of imports and exports showing little change in the month of August, the Commerce Department released a report on Thursday showing that the U.S. trade deficit for the month widened only slightly.
The report said the trade deficit ticked up to $38.8 billion in August from a revised $38.6 billion in July. Economists had expected the deficit to widen to $40.0 billion from the $39.1 billion originally reported for the previous month.
First-time claims for U.S. unemployment benefits fell by less than expected in the week ended October 19th, according to a report released by the Labor Department on Thursday, although the data continued to be distorted.
The report said initial jobless claims dropped to 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000. Economists had expected claims to fall to 340,000 from the 358,000 originally reported for the previous week.
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