Europe midday: Shares stay green despite slight PMI slip

by | Sep 1, 2021

European stocks were higher at midday on Wednesday despite a slight slip in euro zone manufacturing survey data.

The pan-European Stoxx 600 was up 0.49%, with all major regional bourses also higher.

Euro zone manufacturing growth continued to expand in August but supply chain problems due to the Covid-19 pandemic were pushing up prices, according to the IHS Markit final manufacturing Purchasing Managers’ Index (PMI).

The index fell to 61.4 in August from July’s 62.8, below an initial 61.5 flash estimate. This marked a second successive month in which growth has slowed in the sector since June’s record expansion.

An index measuring output, which feeds into a composite PMI due on Friday, fell to 59.0 from July’s 61.1. A reading above 50 indicates growth.

However, shares were boosted by news that unemployment in the eurozone continued to fall, according to data released by Eurostat, dropping to 7.6% in July from 7.8% the month before and from 8.4% over the year.

The seasonally-adjusted rate in the broader European Union, including countries not in the single currency bloc, also fell by 0.2 percentage points over the month, dropping to 6.9 percent in July. The agency estimated that 14.613m EU residents were out of work in July.

Asian shares recovered from earlier losses overnight after data showed factory activity across the region slowed in August as a resurgence in coronavirus cases disrupted supply chains.

The Caixin/Markit manufacturing Purchasing Managers’ Index for August came in at 49.2 on Wednesday, below the 50 mark that separates expansion from contraction.

It came after the official manufacturing PMI released Tuesday showed slowing Chinese factory activity growth in August, coming in at 50.1 against July’s reading of 50.4.

French spirits maker Pernod Ricard rose 2.87% after it posted a stronger-than-expected rise in full-year operating profit, driven by a strong rebound in demand in China and the US.

UK travel and high street retailer WH Smith fell to the bottom of the Stoxx as it warned that 2022 profits would be at the lower end of expectations.

Supermarket group Carrefour slid 4% as luxury goods billionaire Bernard Arnault sold the 5.7% stake he owned in the company.

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