European Stocks Extending Winning Streak

European stocks are up firmly in positive territory around noon on Thursday, extending recent gains, 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 are digesting 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 have also taken 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.

The Bank of England maintained its key interest rate at a record low and quantitative easing, as widely expected, on Thursday.

The Monetary Policy Committee unanimously decided to leave the key interest rate unchanged at 0.10%. The MPC also retained the existing stock of corporate bond purchases at GBP 20 billion and the government bond purchases target at GBP 875 billion, taking the size of total quantitative easing to GBP 895 billion.

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.

The pan European Stoxx 600 is up 0.89%. Germany’s DAX is gaining 0.83% and France’s CAC 40 is up 0.85%, while the U.K.’s FTSE 100 has pared gains and is up just 0.1% now. Switzerland’s SMI is rising 0.84%.

In the UK market, Rolls-Royce Holdings, Halma, Antofagasta, Scottish Mortgage, 3I Group, Ferguson and JD Sports Fashion are gaining 1.5 to 3%.

Entain is down more than 3% on profit taking after recent hefty gains. Hargreaves Lansdown, IAG and Prudential are also notably lower.

In the French market, Faurecia and Valeo are climbing nearly 7% and 6.5%, respectively. Veolia, Renault, Accor, Hermes International, Kering, Carrefour and Air France-KLM are up 1.7 to 2.4%.

In Germany, Continental, Sartorius, Infineon Technologies, Volkswagen, Daimler, Adidas, Porsche Automobile, Zalando and RWE are up sharply.

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.