Wednesday, 23 September 2015 20:27
LONDON: Europe’s main stock markets on Wednesday recovered some of the previous session’s sharp losses, as investors reacted positively to eurozone growth data.
London’s benchmark FTSE 100 index gained 1.98 percent to stand at 6,053.56 points in mid-afternoon trades in the capital.
In the eurozone, Frankfurt’s DAX 30 added one percent to 9,666.49 points and the Paris CAC 40 grew by 0.87 percent to 4,467.09 compared with Tuesday’s close.
The euro rose to $ 1.1157 from $ 1.1132 late in New York on Tuesday, as markets followed a scheduled speech from European Central Bank president Mario Draghi.
European indices had tumbled Tuesday, dragged down by sharp losses to share prices of carmakers and miners on the Volkswagen scandal and a bleak outlook for China’s economy, dealers said.
“Equities are in the green following yesterday’s risk-off session despite a lack of major fresh drivers to explain the positive performance, bar some well-timed bargain hunting, a higher oil price and a rebound in French PMI manufacturing,” said Mike van Dulken, head of research at traders Accendo Markets.
“Ironically, gains are despite disappointing Chinese manufacturing PMI data overnight which only adds to pre-existing concerns about the world’s number two economy, but suggests markets are becoming increasingly accustomed to China data confirming a slower pace of economic growth.”
Growth in the eurozone economy, of which France is a member, slowed in September.
However, despite the monthly dip it still expanded at the fastest quarterly rate in four years, a key business survey showed Wednesday.
Data company Markit said the flash reading of its eurozone Purchasing Managers Index fell to 53.9 points in September from 54.3 points in August.
Despite the drop, the reading was still comfortably above the 50 points mark signifying expansion.
The readings “pointed to steady growth of the eurozone economy at the end of the third quarter”, Markit said.
On the corporate front, shares in auto giant Volkswagen rebounded by 7.64 percent to 114.10 euros on the Frankfurt stock exchange, after plunging over the past two days owing to the pollution cheating scandal.
The job of Volkswagen’s chief executive appeared to be on the line Wednesday over the affair that has sparked a US criminal investigation and worldwide legal action with unfathomable financial consequences for the auto giant.
Martin Winterkorn’s job is now believed to be hanging in the balance, as senior supervisory board members were reportedly meeting to discuss his dismissal.
Elsewhere Wednesday, world oil prices edged higher but gains were capped by persistent concerns about oversupply and slower Chinese growth, analysts said.
Asian stocks tumbled Wednesday after the gauge of Chinese manufacturing activity in September hit a six-and-a-half-year low, sending indices across the region into the red.
US stock followed Europe’s positive lead at open Wednesday, following the route suffered the previous session driven by Chinese growth concerns.
Five minutes into trade, the Dow Jones Industrial Average was up 0.03 percent at 16,336.08 points.
The broad-based S&P 500 added 0.05 percent at 1,943.68, while the tech-rich Nasdaq Composite Index advanced 0.13 percent to 4,763.04.
