European Stocks Rise; More Stimulus on Its Way?

European Stocks Rise; More Stimulus on Its Way?

Investing.com  | Sep 23, 2020 09:00

European Stocks Rise; More Stimulus on Its Way?

By Peter Nurse 

Investing.com - European stock markets climbed Wednesday, following the U.S. higher despite signs that the Eurozone economy came close to stalling again at the end of the third quarter. 

At 4 AM ET (0800 GMT), the DAX in Germany traded 1.5% higher, the CAC 40 in France rose 1.7% and the U.K.'s FTSE index was up 01.9%. 

The 'flash' reading of IHS Markit's purchasing managers index for September fell to 50.1 from 51.9, as "rising infection rates and ongoing social distancing measures curbed demand, notably for consumer-facing services."

French business activity slowed to a four-month low in September, according to its flash PMIm while the news from Germany was more promising, with the key manufacturing PMI release climbing to 56.6 from 52.2 the previous month.

Signs of a slowdown have prompted signs of concern at the European Central Bank, fanning hopes of increased stimulus later this year. The consensus view for some time has been that the ECB would increase its flagship bond buying program at its December meeting, and comments on Tuesday by ECB board member Fabio Panetta, who said the ECB should err on the side of providing too much stimulus rather than too little. 

Earlier, the Financial Times had reported that the ECB would look at extending the flexibility of its Pandemic Emergency Purchase Program to its other asset purchase programs, which would effectively provide a stronger safety net to weaker sovereign states in the monetary union. However, outgoing board member Yves Mersch rebutted both that report and Panetta in an interview with Bloomberg on Wednesday, however.

Sentiment was also boosted by Tuesday's rebound on Wall Street, following comments from Federal Reserve Chairman Jerome Powell, in his testimony to Congress, that the central bank remains committed to using its tools “for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy."

Powell testifies on Capitol Hill again later Wednesday.

In corporate news, BBVA (MC:BBVA) stock climbed 4.6% after the Spanish bank raised its guidance for 2020, thanks mostly to an improvement in its Mexican business. Adidas (DE:ADSGN) shares rose 6.3% after stellar results announced late on Tuesday by its biggest rival, Nike

Oil prices stabilized Wednesday after a surprise rise in U.S. oil inventories added to persistent worries about fuel demand as a surge in coronavirus cases around the globe led to stricter containment measures.

The industry body, the American Petroleum Institute, reported late Tuesday that crude oil inventories rose by 691,000 barrels in the week to Sept. 18, compared with forecasts for a drop of 2.3 million barrels. Official data is due out later Wednesday.

U.S. crude futures traded 0.1% lower at $39.77 a barrel, while the international benchmark Brent contract rose 0.1% to $41.76. 

Elsewhere, gold futures fell 1.5% to $1,879.05/oz, while EUR/USD traded 0.1% lower at 1.1697.

 

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.

';