European stocks moved higher on Thursday amid continued optimism about growth, and easing concerns about Evergrande’s debt after the Chinese central bank’s infusion of massive capital into the country’s banking system.
The markets digested the monetary policy announcements from the Bank of England and the Swiss National Bank, and a slew of other economic data from the region.
Markets also took note of the Federal Reserve’s statements which did not give any timeline for tapering of its monetary stimulus. Also, the Federal Open Market Committee voted unanimously to keep short-term rates anchored near zero on Wednesday and was still split on the timing of the first interest rate hike.
Among the major markets, the U.K. failed to hold gains and ended marginally down after the Bank of England opined that the recent price developments appeared to have strengthened the case for a modest tightening of monetary policy.
The BoE left rates steady at 0.1% and Quantitative Easing steady at 895 billion pounds.
the IHS Markit/CIPS flash PMI releases for September indicated that Manufacturing PMI fell to 56.3 from 60.3 in the prior month; Services PMI decreased to 54.6 from 55.0 in August; and Composite PMI dropped to 54.1 from 54.8 in August.
The pan European Stoxx 600 ended stronger by 0.93%. Germany’s DAX climbed 0.88% and France’s CAC 40 surged up 0.98%.
Switzerland’s SMI gained 0.85%. The Swiss National Bank left its expansionary monetary policy unchanged on Thursday, in order to ensure price stability and underpin economic recovery from the coronavirus-driven downturn.
Policymakers of the central bank decided to retain the policy rate and interest on sight deposits at the SNB at -0.75%.
The bank reiterated that it is willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on the Swiss franc. The bank repeated that the Swiss franc remains highly valued.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Netherlands, Norway, Portugal, Russia, Spain and Sweden closed higher.
Greece, Iceland, Ireland, Poland and Turkey ended weak.
In the UK market, Rolls-Royce Holdings rallied nearly 4%. Lloyds Banking Group gained about 2.5%. Scottish Mortgage, Natwest Group, Glencore, Barclays Group, Anglo American Plc, Antofagasta, Standard Chartered, Burberry Group and Legal & General gained 1 to 2%.
Entain declined nearly 5% on profit taking after recent hefty gains. Polymetal International, Hargreaves Lansdown, Intertek Group, Prudential, Persimmon, IAG and National Grid also ended notably lower.
In the French market, Valeo climbed nearly 8.5%. Faurecia surged up almost 7%. Veolia, Renault, Societe Generale, Hermes International, Credit Agircole, Technip, Carrefour, Kering, Vivendi, LVMH, Sodexo and STMicroElectronics gained 1.5 to 3.2%.
In Germany, Sartorius gained nearly 5.5%. Continental and Infineon Technologies both ended stronger by about 2.8%. Zalando, Daimler, Adidas, Puma, Deutsche Bank, RWE, Deutsche Telekom and Volkswagen also ended notably higher.
In other economic news, the IHS Markit Germany flash PMI releases for September indicated that Manufacturing PMI fell to 58.5 from 62.6 in the prior month, Services PMI decreased to 56 from 60.8 in August and Composite PMI dropped to 55.3 from 60.0 in August.
Eurozone’s IHS Markit flash PMI releases for September also indicated similar trend as Manufacturing PMI slipped to 58.7 from 61.4 in the prior month, Services PMI decreased to 56.3 from 59 in August and Composite PMI dropped to 56.1 from 59.0 in August.
France’s private sector logged the slowest pace of growth since April as the rates of expansion lost steam in manufacturing and services sectors in September, flash survey data from IHS Markit showed. The flash composite output index dropped to a five-month low of 55.1 in September from 56.9 in August. The reading was also below economists’ forecast of 55.8.
Survey results from the statistical office Insee showed France’s business confidence index fell to 106 in September from 110 in August. The index was forecast to fall marginally to 109.
Market Analysis
European Stocks Close Higher Again
2021-09-23 16:54:35
