Investing.com – European stocks traded broadly higher for a second-day running on Tuesday in a positive start to 2017 as investors chewed over positive economic data and London traders returned to their desks after the prior day’s holiday.
Near midday in Europe, the benchmark Euro Stoxx 50 gained 0.31%, France’s CAC 40 advanced 0.40%, though Germany’s DAX 30 broke the trend and traded unchanged.
On the economic calendar, China’s Caixin manufacturing purchasing managers’ index (PMI) for December sparked positive sentiment as it rose to 51.9, beating expectations for a slight slip to 50.7. The reading of manufacturing activity in the world’s second largest economy was near a four-year high, giving the sector a solid boost heading into 2017.
In Europe, all eyes were on inflation with the French harmonized consumer price index (CPI) hitting 0.8% in December, its highest level since May 2014.
Traders were still looking ahead to the publication of inflation data from Germany out at 8:00AM ET (13:00GMT), but regional readings from the euro zone’s number one economy were pointing towards stronger price increases.
Earlier, Germany also reported that the unemployment rate remained steady at a record low of 6.0% in December, though claims dropped by 17,000 people, compared to forecasts for a decline of just 5,000.
In the U.K., the manufacturing PMI showed positive news as the reading jumped to a 30-month high. Of note, manufacturers were signaling that high levels of inflation were due to the weakness in the pound, prevalent since Britain voted to exit the European Union.
The data caused sterling to jump to a two-week high against the euro.
Meanwhile, oil prices hit an 18-month high on its first day of trading in 2017 as traders watched developments surrounding the landmark deal reached by the Organization of the Petroleum Exporting Countries and several non-OPEC oil producers to reduce their output this year.
Energy stocks were broadly higher, as French oil and gas major Total SA (PA:TOTF) gained 0.46% and Italy’s ENI (MI:ENI) advanced 0.45%, while Norwegian rival Statoil (OL:STL) climbed 1.38%.
Financial stocks added to gains, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) jumped 1.66% and 2.57%, while Germany’s Commerzbank (DE:CBKG) soared 1.39%. Deutsche Bank (DE:DBKGn) was an exception to the rule, losing 0.71%, on profit-taking after it gained 1.7% on Monday.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) gained 0.80%, though Unicredit (MI:CRDI) dropped 0.43%, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) traded up 0.73% and 1.12%.
Over in London, traders returned to their desks for the first time in 2017 after Monday's holiday. The commodity-heavy FTSE 100 gained 0.30%, boosted by gains in the mining sector.
Shares in Glencore (LON:GLEN) rallied 2.78% and Anglo American (LON:AAL) advanced 1.08%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) gained 0.92% and 0.17% respectively.
Energy stocks added to gains, as BP (LON:BP) advanced 1.04% and rival Royal Dutch Shell (LON:RDSa) soared 0.27%.
Financial stocks were also on the upside, with shares in HSBC Holdings (LON:HSBA) up 1.43% and the Royal Bank of Scotland (LON:RBS) rallying 1.92%, while Barclays (LON:BARC) and Lloyds Banking (LON:LLOY) jumped 2.42% and 2.22% respectively.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures gained 0.62%, S&P 500 futures rose 0.61%, while the Nasdaq 100 futures advanced 0.68%.