Investing.com – European stock markets traded higher on Thursday, buoyed by data that showed business activity in the euro zone hit a six-month high and an upbeat economic outlook from the Federal Reserve on the American economy.
In midday trade in Europe, the benchmark Euro Stoxx 50 gained 0.81%, France’s CAC 40 rose 0.88% while Germany’s DAX 30 advanced 0.73%.
The German benchmark hit a record high of 12,634.3 points Thursday on the back of a positive economic data that revealed an improving outlook.
The IHS Market composite purchasing managers’ index (PMI) for the euro zone hit a six-month high at the start of the second quarter.
“With the final reading coming in slightly above the earlier flash estimate, the PMI surveys portray an economy that is growing at an encouragingly robust pace and that risks are moving from the downside to a more balanced situation,” IHS Markit chief economist Chris Williamson said.
The report for the U.K. also gave a positive read, showing the fastest growth in the services sector so far this year, surprising analysts who had expected a slight slowdown in April.
In other positive data, the euro zone saw retail sales increase by 0.3% in March, better than the 0.1% gain expected.
Even prior to the data releases, European equities had been gaining ground on the positive economic outlook given by the Fed on the American economy. While leaving interest rates unchanged in the U.S., the Fed said it "views the slowing in growth during the first quarter as likely to be transitory" adding that it believes the fundamentals underpinning continued growth of consumption continued to be solid.
Back in Europe, eyes also remained on the upcoming second and final vote for the French president on May 7.
Pro-European centrist Emmanuel Macron was considered to have won a TV debate held late Wednesday against anti-euro, far-right candidate Marine Le Pen by 63% to 37%, according to a post-debate poll by Elabe.
The perceived victory helped boost European equity markets and also resulted in a drop in French sovereign bond yields, suggesting risks were receding ahead of Sunday’s election.
Amid a slew of earnings released Thursday, shares in HSBC (LON:HSBA) gained more than 3% as a 20% drop in pretax profit was not as bad as markets had feared.
Royal Dutch Shell (NYSE:RDSa) rose nearly 3% as the Dutch oil company reported a 130% jump in net income thanks to the recovery in crude prices.
On the downside, Fingerprint Cards led the Stoxx 600 lower with losses of 10% as the Swedish maker of fingerprint sensors missed first-quarter earnings forecasts and warned of sector oversupply.
Next PLC (LON:NXT) was the second largest decliner on the pan-European index, down more than 5%, as the British retailer cut growth and profit forecasts, claiming that “the UK consumer environment remains challenging”.
Dampening some of the enthusiasm in the banking sector on the back of HSBC’s results, Societe Generale (PA:SOGN) saw downside Wednesday after a 19% drop in profit brought the bottom line below expectations.
Meanwhile, oil prices struggled near a five-week low in European trading on Thursday, as concern over a global supply glut lingered after data showed U.S. crude stockpiles fell less than expected last week.
Energy stocks traded higher, as French oil and gas major Total SA (PA:TOTF) gained 1.35%, Italy’s ENI (MI:ENI) rose 1.26%, while Norwegian rival Statoil (OL:STL) traded up 2.54%.
Financial stocks showed mixed trade, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) fell 0.08% and 0.54%, respectively, while Germany’s Commerzbank (DE:CBKG) and rival Deutsche Bank (DE:DBKGn) gained 1.50% and 1.58%, respectively.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) rose 1.86% and Unicredit (MI:CRDI) jumped 3.44%, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) traded up 1.52% and 1.12%, respectively.
In London, the commodity-heavy FTSE 100 gained 0.33%, despite weakness in mining stocks.
Shares in Glencore (LON:GLEN) fell 1.43%, Anglo American (LON:AAL) salumped 2.06%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) traded down 1.53% and 0.59%, respectively.
Energy stocks recorded gains, as BP (LON:BP) rose 0.10% and rival Royal Dutch Shell (LON:RDSa) jumped 2.82%.
Financial stocks were mostly higher, with shares in HSBC Holdings (LON:HSBA) up 3.55% while the Royal Bank of Scotland (LON:RBS), Lloyds Banking (LON:LLOY) and Barclays (LON:BARC) gained 0.23%, 0.45%, and 0.57%, respectively.
In the U.S., futures pointed to a higher open. The Dow Jones Industrial Average futures gained 0.27%, S&P 500 futures advanced 0.27%, while the Nasdaq 100 futures traded up 0.30%.