Investing.com | Dec 16, 2019 10:32
By Geoffrey Smith
Investing.com -- Europe’s benchmark stock index hit a new all-time high Monday as investors poured money into U.K. stocks and the continent continued to enjoy support from news of the U.S.-China trade truce on Friday.
By 5:15 AM ET (1015 GMT), the benchmark Stoxx 600 index was at 416.46, just off the new record high of 416.60 that it posted earlier in the morning. The U.K. FTSE 100 was up 2.0% as international investors took advantage of a dip in sterling, which paused for breath after a steep rally in the wake of last week’s general election. Mining stocks in particular were supported by data overnight suggesting that the Chinese economy is bottoming out.
The DAX lagged a little, rising only 0.6%. That was due in part to reports that China had threatened Germany with “consequences” if Berlin moves to exclude Huawei from building sensitive 5G telecoms networks.
The gains across the continent were somewhat at odds with ‘flash’ purchasing manager indexes which showed no real sign of improvement in manufacturing activity after a year in which they have tumbled to the lowest levels in a decade.
IHS Markit’s manufacturing PMI for the euro zone fell to 45.9 from 46.9 in November, with both the French and German indexes falling short of expectations. The composite eurozone PMI stayed just in positive territory at 50.6, thanks to slightly better-than-expected contributions from services.
However, that rounded off the weakest quarter for the Eurozone economy since it emerged from recession in 2013.
“Germany’s steep manufacturing downturn has added to the chance of its economy contracting slightly in the fourth quarter, but France is enjoying a more resilient performance, providing a key area of support to help keep the eurozone growing,” IHSMarkit’s Chris Williamson said in a statement.
Although new export orders in the region’s largest economy ticked up slightly, “the ‘green shoots’ narrative remains more a forecast than rooted in actual data,” said Dario Perkins, head of global macro strategy at TS Lombard in London.
Business activity in the U.K. declined in both manufacturing and services in December, according to its flash PMIs. However, those surveys have already been superseded by the election, which has changed investor sentiment toward the world’s most unloved asset class – U.K. equities – almost overnight.
Despite the generally positive tone, the most conspicuous individual movements were down: Swedish appliance maker Electrolux (ST:ELUXb) fell 12% after saying that it would incur higher-than-expected costs from moving to new facilities in the U.S. and that cost savings would not be as high next year as it had first forecast. Meanwhile U.K.-based Cineworld (LON:CINE) fell 7.8% after saying it will buy Canada’s biggest operator of movie theaters, Cineplex, for $2.1 billion, in a debt-financed deal that will leave it highly leveraged. On the more positive side, slower-than-expected quarterly sales growth failed to stop fast fashion giant H&M (ST:HMb) rising over 2% to a new one-month high.
Written By: Investing.com
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.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.