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European stocks edge higher; Chinese data hints at global recovery

Published 03/01/2023, 03:46 AM
Updated 03/01/2023, 04:03 AM
© Reuters.

© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded higher Wednesday, helped by optimism that China’s important manufacturing sector could lead a global economic recovery. 

At 03:45 ET (08:45 GMT), the DAX index in Germany traded 0.2% higher, the CAC 40 in France climbed 0.3% and the FTSE 100 in the U.K. rose 0.4%.

China's manufacturing activity expanded at the fastest pace in more than a decade in February, as the recovery of the second largest economy in the world gained momentum after the relaxing of its severe anti-COVID restrictions. 

The widely-watched manufacturing Purchasing Managers’ Index rose to 52.6 in February, data showed on Wednesday, a jump from January’s figure of 50.1. 

This news of growth in one of Europe’s key export markets provided a boost to the European markets Wednesday.

The good news continued in Europe, as Spain’s manufacturing PMI climbed to 50.7 in February, rising into expansionary territory for the first time since June 2022, up from 48.4 the previous month.  

Investors will have global manufacturing PMIs for the Eurozone, Germany and France to sift through later in the session.

However, gains are likely to be limited after inflation data for the North Rhine-Westphalia region, Germany’s industrial heartland, showed an annual increase to 8.5% in February, from 8.3% the prior month.

Inflation data in both France and Spain came in higher than expected on Tuesday, suggesting that the European Central Bank will continue to lift borrowing costs in the months to come.

In the corporate sector, Puma (ETR:PUMG) stock fell 2.1% after the German sports gear maker warned that profit is likely to fall this year as high interest rates and inflation crimp consumer spending, even after raising its dividend after record sales in 2022. 

Beiersdorf (ETR:BEIG) stock fell 1.2% after the company said it expects sales growth to slow this year after a bumper 2022 thanks to strong demand for its skin care products.

Persimmon (LON:PSN) slumped over 9% after the U.K. housebuilder’s CEO warned that economic turmoil will hit the housing market this year, with competition set to almost half.

Just Eat (AS:TKWY) stock fell almost 6% after the food delivery service reported a slide in orders as customers reined in spending on takeaways even as it swung to an operating profit in 2022.

Oil prices rose Wednesday after the stronger-than-expected Chinese manufacturing activity data boosted optimism in the recovery of the world’s largest crude importer.

This has overshadowed another sharp rise in crude stockpiles in the United States, the world's biggest oil consumer and producer. 

Data from the American Petroleum Institute showed stocks rose by 6.2 million barrels last week. Official U.S. government data are due later in the session.

By 03:45 ET, U.S. crude futures traded 0.7% higher at $77.58 a barrel, while the Brent contract rose 0.7% to $84.04. 

Additionally, gold futures rose 0.2% to $1,840.55/oz, while EUR/USD traded 0.6% higher at 1.0639.

Latest comments

Oh! Oh!  How can you believe in the Chinese data?
Oh! Oh!  How can you believe in the Chinese data?
The China story is propaganda. If China does not change its stance, the economy in China will go down as the demand for Chinese goods go down.
It's unbelievable how these ppl are allowed to write such articles while very well know the economic situation 🙈🙈
The economic situation is good and way better than people like you predicted it would be 9 months ago. Get over it
tik tok is the pivot....... 🤦🏽🤦🏽😫😫🤣🤣
I wonder How much money this reporter gets from manipulators? Gee... Blind to many bad news, but cheer to one good news.
Actually that is the exact opposite of what bears are doing. Only seeing negative
 Not only bears, but also many economic datas. Wake up. market is too much high without reasonable ground. Agree?
Bulls try to do anything, pivot is coming in 2023. No. Disinflation is coming, No. cpi, ppi, non farm, pce everytime No. Now they put China reopen card on the table. What are they? Manipulators want to hand over their position to innocent traders and escape from market. That's it.
Maybe soon china's fake growth released, it will be the first day of break down in market. I'm very sick of Bull's lies lies lies.
How do you believe anything from chy-na or the us government
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