LONDON: European stock markets rose yesterday on encouraging manufacturing data which suggests the eurozone economy may be climbing out of recession.
Markets brushed aside news of record high unemployment in the eurozone and more weak Chinese economic data, while gold prices rebounded from the lowest levels since August 2010.
In company activity, German engineering giant Siemens drew a line under its joint venture with Finnish telecom equipment maker Nokia.
London’s FTSE 100 index of leading shares climbed 1.49 percent to close at 6,307.78 points, Frankfurt’s DAX 30 index added 0.31 percent to 7,983.92 points, while in Paris the CAC 40 rose 0.76 percent to 3,767.48 points.
Milan leaped 1.45 percent and Madrid soared 1.86 percent.
In foreign exchange trading, sterling slid against the euro but rose versus the dollar. The European single currency meanwhile rose to $1.3053 from $1.3013 late in New York on Friday.
The dollar grew to 99.63 yen from 99.11 yen on Friday.
On the London Bullion Market, the price of gold climbed to $1,242.75 an ounce from $1,192 late on Friday. Gold last week hit a near three-year low point at $1,180.50 an ounce.
The precious metal, seen as a safe haven amid economic strains, has been battered by receding worries about higher inflation, upbeat US data, a strong dollar and expectations of an end to the Federal Reserve’s quantitative easing (QE) stimulus. Gold lost a quarter of its value in the second quarter, which ended on Friday. That is the heaviest quarterly loss since the early 1970s.
The Markit Eurozone Composite Purchasing Managers Index, a survey of what businesses see happening in their production processes, rose to 48.8 in June — a 16-month high — from 48.3 in May.
A score on the PMI index, considered to be a reliable indicator of future activity, below 50 indicates contraction and a reading above implies economic expansion.
“European investors appear to have taken the positives from today’s better than expected European manufacturing PMI reports from Spain, as well as Italy as evidence that the European economy may at last be starting to gain traction, albeit from very low levels,” said Michael Hewson, senior market analyst at CMC Markets UK. Britain’s PMI also came in much higher than expected at 52.5, indicating the economy expanded.
In company activity, shares in Siemens rose 2.5 percent to ¤79.63 after the German giant pulled out of its joint venture with Finnish telecom equipment maker Nokia, selling its 50-percent stake in Nokia Siemens Networks for $2.2bn. Nokia shares jumped over 7 percent but pulled back to close with a gain of 3.6 percent to ¤2.95.
US stocks also advanced with the Institute for Supply Management’s manufacturing PMI showing an expansion for June, rising to 50.9 from 49 in May. Construction spending also rose 0.5 percent on the month in May.
In midday trading the Dow Jones Industrial Average was showing a gain of 1.04 percent to 15,063.95 points, the broader S&P 500 climbing 1.16 percent to 1,624.94 points and the tech-heavy Nasdaq rising 1.40 percent to 3,450.98 points. AFP
