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European Stocks Higher; PMI Data Indicate Slowing Recovery By

© Reuters

By Peter Nurse – European stock markets traded higher Thursday, despite business surveys indicating a regional slowdown, as sentiment surrounding the heavily indebted property group China Evergrande (HK:) improved and the Federal Reserve delayed tapering its asset purchases.

At  4:05 AM ET (0805 GMT), the in Germany traded 1% higher, the in France rose 0.9% and the U.K.’s climbed 0.5%.

Germany’s economic recovery from the Covid-19 pandemic lost momentum in September, with its flash showing growth in the manufacturing sector slowed to an eight-month low reading of 58.5 from 62.6 in August.

There was a similar story in France, as the country’s preliminary – factoring in both the services and manufacturing sectors – fell to 55.1 points in September from 55.9 in August.

Later in the session, the announces its latest monetary policy decision later in the session, but the central bank is not expected to change its record-low interest rates or the extent of its asset purchases. Norway’s central bank raised its key rate from 0.25% to 0.25%. It is the first country to raise this level since the outbreak of the pandemic. The central bank of Turkey also meets earlier.

After the completion of the last, the U.S. central banks indicated that they will likely start reducing their monthly bond purchases towards year end. This was a good sign for global sentiment. The surprise was good for the minority who expected a quick withdrawal of the stimulus, which had supported the economy in the aftermath of the pandemic.

Also helping the tone were solid gains in Chinese markets Thursday, after the People’s Bank of China injected more money into the banking system, easing concerns about the fallout from China Evergrande’s debt crisis. 

In corporate news, Royal Mail (LON:) stock dropped 0.7% after the group warned about rising costs while reporting a 9% fall in total parcel deliveries by volume across July and August. 

French car parts company Faurecia (PA:) stock rose 6.7% even as it lowered its main 2021 financial targets due to a sharp reduction in worldwide automotive production on the back of a semiconductor chip shortage.

Crude prices edged higher Thursday, supported by another decline in U.S. oil stocks as production in the important Gulf of Mexico region remained hampered by the damage caused by two recent hurricanes, while U.S. crude stockpiles fell to a three-year low. 

By 4:05 AM ET, futures traded 0.1% higher at $72.27 a barrel, while the contract gained 0.1% to $76.23. 

Additionally, fell 0.7% to $1,766.65/oz, while traded 0.2% higher at 1.1713.


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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.