Investing.com | Sep 23, 2020 09:00
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.
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.
Written By: Investing.com
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