This ad will auto close in 10 seconds

European stocks rebound, euro at new two-year high

AFP | Last Updated: Thursday, October 24, 2013 - 18:24

London: Europe`s main stock markets rebounded on Thursday, as positive Chinese manufacturing data helped to offset weak eurozone numbers, while the euro hit a new two-year high against the dollar.

London`s benchmark FTSE 100 index rose 0.50 percent to stand at 6,707.89 points nearing midday in the British capital.

Frankfurt`s DAX 30 climbed 0.71 percent to 8,983.41 points -- closing in on 9,000 for the first time ever -- and the CAC 40 in Paris grew 0.28 percent to 4,272.59 points.

"Better-than-expected manufacturing data from China provided an excuse for investors to dive back into the equity markets in full throttle," said Spreadex trader Shavaz Dhalla.

The region`s main stock markets had slid on Wednesday on profit-taking as traders looked nervously on plans by the European Central Bank to assess the balance sheets of eurozone banks.

Data published on Thursday by HSBC showed the bank`s preliminary Chinese purchasing managers` index (PMI) for this month was 50.9, a significant improvement from September`s 50.2 and the highest since 51.6 in March.

The index tracks manufacturing activity in China`s factories and is a closely watched gauge of the health of the economy. A reading above 50 indicates growth, while anything below signals contraction.

By contrast, eurozone business activity slowed in October, coming off a 27-month high in September to highlight concerns the economy is recovering only slowly from recession, a separate survey showed.

The closely-watched PMI compiled by Markit Economics fell to 51.5 points in October from 52.2 in September.

Despite the poor data, "the euro is still looking impressive against the dollar and is being supported by a view that the US Federal Reserve is now not likely to taper (its stimulus) until 2014", added Currencies Direct dealer Phil McHugh.

The European single currency reached USD 1.3822 -- the highest point since November 2011. It later stood at USD 1.3787, which compared with USD 1.3776 late in New York on Wednesday.

The dollar stood at 97.39 yen, unchanged compared with Wednesday.

Sterling was steady at 85.24 pence to the euro and slightly up at USD 1.6176

On the London Bullion Market, the price of gold firmed to USD 1,336.74 an ounce from USD 1,331.25 on Wednesday.

Also in stock market activity on Thursday, Madrid`s IBEX 35 index gained 0.39 percent to 9,867 points after Spain announced a dip in its towering unemployment rate in the latest sign that the eurozone`s fourth-largest economy is battling its way out of a long recession.

The jobless rate eased for the second straight quarter to a still high 25.98 percent in the third quarter of 2013, a report by the National Statistics Institute showed.

The news dovetailed with a Bank of Spain assessment the previous day that Spain had emerged from recession in the third quarter with timid 0.1-percent economic growth.

"There was a hat-trick of good news for Spain, with data today showing the unemployment rate fell, coupled with a surge in profit`s at Banco Santander and yesterday`s report from the central bank that it has finally emerged from a 2 year recession," noted CMC Markets trader Toby Morris.

"While these are hopefully the green shoots of a fuller recovery, we can`t forget the base that we are working from, with the jobless rate still at an eye watering 26 percent."

First Published: Thursday, October 24, 2013 - 18:24
comments powered by Disqus