Investing.com - Manufacturing activity in France contracted at a faster rate than expected in October, fuelling concerns over the economic outlook of the euro zone’s second largest economy, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index fell to a seasonally adjusted 47.3 this month from a final reading of 48.8 in September. Analysts had expected the index to dip to 48.5 in October.
Meanwhile, the preliminary services purchasing managers’ index declined to an eight-month low of 48.1 this month from 48.4 in September and worse than expectations for a reading of 48.2.
The seasonally adjusted Markit Flash France Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell from 48.4 in September to an eight-month low of 48.0 in October.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, “The French economy remained stuck in reverse gear in October, as crumbling demand dragged activity lower."
EUR/USD was trading at 1.2621 from around 1.2638 ahead of the release of the data, while EUR/GBP was at 0.7873 from 0.7877 earlier.
Meanwhile, European stock markets were lower after the open. The DJ Euro Stoxx 50 lost 0.7%, France’s CAC 40 shed 0.9%, Germany's DAX slumped 0.9%, while London’s FTSE 100 declined 0.95%.