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The broad-based major European indices closed sharply higher in Monday trading as global markets reacted positively to news that the US and China have agreed to a trade war truce.

In economic news, November's IHS Markit Eurozone Manufacturing PMI indicated the growth slowdown of the single currency area's manufacturing economy is continuing as the final PMI dropped to 51.8 in November from 52.0 in October, which is the lowest reading since August 2016. IHS said weakness was centered on the investment goods sector, according to market groups data. Capital goods producers registered net falls in both production and new work, while export trade was also down for a third month running, and cost pressures remained elevated. In contrast, solid growth continued to be recorded among consumer goods producers.

The euro area's 'big-four' economies - the UK, Germany, France, and Italy - posted the lowest manufacturing PMI readings of all countries covered by the survey during November. Italy recorded a second straight monthly deterioration in manufacturing operating conditions, registering its lowest PMI reading in nearly four years. France saw growth ease toward stagnation, while Germany reported its weakest expansion in more than two-and-a-half years.

Meanwhile Spain saw a slight improvement in growth, while there were also stronger gains seen in Austria, Greece and Ireland. The Netherlands continued to register the highest expansion, despite the pace of growth slipping to its lowest in over two years.

"November's PMI data underscore the extent to which manufacturing conditions have become more challenging, indicating that production could act as a drag on the eurozone economy in the fourth quarter," said Chris Williamson, chief business economist at IHS Markit. "Manufacturers reported that demand is now falling in Germany, France and Italy, while only modest growth was recorded in Spain."

Williamson added that "the darker outlook is linked to trade wars and tariffs as well as intensifying political uncertainty and has led to increased risk aversion and a commensurate cutting back on expenditure, notably for investment."

The Governing Council of the European Central Bank (ECB) adopted legal acts on the regular five-yearly adjustment to its capital key and the contributions paid by the national central banks (NCBs) of the European Union. The new key for subscription to the ECB's capital will enter into force on Jan. 1.

The shares of the NCBs in the ECB's capital are weighted according to the share of the respective member countries in the total population, and gross domestic product of the EU in equal measure.

The weightings are based on data provided by the European Commission. NCBs will transfer capital shares among themselves to the extent necessary to ensure that the distribution of the shares corresponds to the adjusted key.

Following the latest review, 16 central banks will have a higher share in the ECB's capital than before, and 12 central banks will have a lower share.

In equities, mining stocks helped boost the FTSE in London as Antofagasta, Evraz, Anglo American, and BHP Billiton, climbed 7.9%, 7.6%, 7%, and 5.9% respectively, while Rio Tinto closed 4% higher. Energy services firm John Wood Group was up 6.2%, while online gambling company GVC Holdings, financial services firm Hargreaves Lansdown, and luxury goods company Burberry Group gained 5.1%, 4.7%, and 4.6% respectively.

In Frankfurt, automotive stocks buoyed the DAX as automakers BWM, Daimler, and Volkswagen climbed 4.8%, 4.5%, and 2.9% respectively, while tire maker Continental closed 3.3% higher. Internet company Wirecard led all gainers rising 5.5%, while industrial group Thyssenkrupp, and semiconductor company Infineon were up 3.9% and 3.8%. Pharmaceutical firms Bayer and Merck increased 3.1% and 2.5% respectively, while kidney dialysis company Fresenius Medical Care closed 2.6% higher.

In Paris, auto parts supplier Valeo, and luxury goods company Kering led the CAC higher, rising 8.0% and 7.7% respectively. They were followed by semiconductor company STMicroelectronics, and Software firm Dassault Systemes, which climbed 6.0% and 5.3%. Luxury goods company Louis Vuitton closed up 5%, and oilfield services firm TechnipFMC was up 4.1%. Meanwhile, steel and mining company ArcelorMittal closed 4% higher, while luxury goods company Hermes International increased 3.4%.

The FTSE rose 1.18%, the DAX climbed 1.85%, and the CAC-40 gained 1.00%.

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