Investing.com - Service sector activity in Italy unexpectedly contracted for the first time in five months in August, fuelling concerns over the health of the euro zone's third largest economy, data showed on Wednesday.
In a report, market research group Markit said that its Italian services purchasing managers’ index fell to a seasonally adjusted 49.8 last month from a reading of 52.8 in July. Analysts had expected the index to dip to 52.0 in August.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Commenting on the report, Phil Smith, economist at Markit said, “Italy’s private sector economy is going through a soft patch, with a return to contraction in service sector business activity accompanying a slowdown in the rate of growth of manufacturing output."
"Based on this, the chances of GDP returning to growth in the third quarter appear slimmer," he added.
Following the release of the data, the euro was lower against the U.S. dollar, with EUR/USD easing down 0.02% to trade at 1.3131.
Meanwhile, European stock markets were higher after the open. Italy's FTSE MIB rose 0.95%, the DJ Euro Stoxx 50 tacked on 0.8%, France’s CAC 40 advanced 0.7%, London’s FTSE 100 edged up 0.6%, while Germany's DAX added 0.35%.