European stock markets rallied on Monday, after mostly upbeat PMI numbers from the region and as data from China signaled an improvement in that country’s manufacturing sector.
The Stoxx Europe 600 index jumped 1.5% to 301.83, erasing a 0.9% loss from Friday.
Shares of Vodafone Group PLC put on 3.4% after sources said the telecom firm has reached a tentative deal to sell Verizon Communications Inc. its 45% stake in their joint venture Verizon Wireless for $130 billion. Vodafone confirmed it is in advanced discussions with Verizon about the sale, but said there is no certainty an agreement will be made.
Other telecom firms were also on the rise after Goldman Sachs lifted the sector to neutral from cautious based on recent consolidation activities. Shares of Telecom Italia SpA gained 5.8% and Deutsche Telekom AG added 1.3%.
More broadly, investors took inspiration from Asia where most indexes closed higher on the back of upbeat Chinese data. The official Chinese manufacturing Purchasing Managers’ Index rose to 51.0 in August compared with 50.3 in July, while the HSBC PMI climbed to a final reading of 50.1 in August from 47.7 in July.
Data released also showed Eurozone PMI Manufacturing grew to 51.4 points in August, from 50.3 points in July, almost in line with forecasts of 51.3.
Separate report showed German PMI Manufacturing grew to 51.8 points in August, from 50.7 points in July. Analysts expected an increase to 52.
The UK PMI Manufacturing surprised to the upside in August rising to 57.2 points in August, from 54.8 points in July. Analysts expected less growth to 55.
Mining firms, which are sensitive to growth indications from China, posted some of the biggest gains in European trading. Shares of Rio Tinto PLC gained 3.6%, Anglo American PLC picked up 3.8%, and BHP Billiton PLC added 2.8%.
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