European Stocks Higher; European Manufacturing Data Impresses


By Peter Nurse – European stock markets surged Monday, boosted by healthy manufacturing data in the region, a semblance of calm in global bond markets and more positive news of Covid-19 vaccines.

At 5:05 AM ET (1005 GMT), the DAX in Germany traded 1.1% higher, the CAC 40 in France rose 1.5% and the U.K.’s FTSE index climbed 1.7%.

European PMI data came in ahead of expectations, climbing to 57.9 in February from 54.8 last month, with the dominant German manufacturing sector expanding at an impressive rate. This suggested that this important sector has weathered the current mobility restrictions throughout the continent in a better shape than the first lockdowns.

The equivalent news out of Asia was mixed earlier Monday, as Japan’s factory activity expanded at the fastest pace in over two years in February, while Chinese factory activity grew at the slowest pace in nine months.

Government bond yields have stabilized at the start of the week after last week’s sharp gains, lessening the pressure on stock markets as rising yields made equities look less attractive to investors.

Yields on the benchmark U.S. 10-year notes traded last at 1.40%, below last week’s peak of 1.61% as investors had worried that rising inflation could drive major central banks to tighten monetary policy more quickly than expected.

Helping the tone has been the passage of the $ 1.9 trillion Covid relief bill through the U.S. House of Representatives on Saturday, it now heads to the Senate, and Johnson&Johnson’s one-shot vaccine receiving American authorization over the weekend.

Turning to the European corporate sector, travel&leisure stocks jumped, with British Airways-owner IAG (LON:ICAG) leading the way, up over 5%, as investors look for a summer reopening of holiday travel.

Danone (PA:DANO) stock rose 2.3% after the French dairy giant prepared to sell its $ 1 billion stake in China’s Mengniu and AstraZeneca (NASDAQ:AZN) stock climbed 1.7% after The Times newspaper reported that the drug maker has sold its 7.7% stake in Moderna (NASDAQ:MRNA) for more than $ 1 billion.

Logitech (NASDAQ:LOGI) stock rose 3% after the computer goods maker lifted its fiscal 2021 outlook, helped by pandemic-driven work-from-home phenomia.

Oil prices pushed higher Monday, with traders expecting future demand growth on the back of the U.S. stimulus package passing its latest hurdle.

On the supply side, the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet later this week. These top producers will likely discuss the option of allowing significantly more oil into the market given the recent price rises.

U.S. crude futures traded 1.9% higher at $ 62.66 a barrel, while the international benchmark Brent contract rose 1.9% to $ 65.63.

Elsewhere, gold futures rose 1.1% to $ 1,747.75/oz, while EUR/USD traded 0.2% lower at 1.2051.

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