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Europe: Equities enjoy bright start to second quarter


[LONDON] European stock markets charged upwards Wednesday in a positive start to the second quarter on the back of upbeat manufacturing data in China and the eurozone, dealers said.

London's benchmark FTSE 100 index gained 0.54 per cent on the day to 6,809.5 points, Frankfurt's DAX 30 index climbed 0.29 per cent to 12,001.38 points, and the CAC 40 in Paris rose 0.57 percent to 5,062.22 points.

The European single currency also rose to US$1.0771 from US$1.0741 late in New York on Tuesday.

"European stocks got off to a strong start to the first session of the second quarter as economic data released earlier today indicated that the recovery in the eurozone is well on track, dispelling concerns that have kept the pressure on risk assets in recent sessions," said analyst Kash Kamal at Sucden Financial Research.

Eurozone manufacturing activity accelerated sharply in March in a fresh sign of economic recovery, a key survey showed.

Markit Economics said its Purchasing Managers Output Index (PMI) for the 19-nation single currency bloc's manufacturing sector climbed to 52.2 points last month from 51 in February, according to a second estimate, putting it well above the 50-points boom or bust line.

That marked an upgrade from the initial March reading of 51.9 points.

"Better-than-expected eurozone PMIs helped to accelerate the momentum to the upside," noted analyst Markus Huber at broker Peregrine & Black.


"Today it's all about manufacturing kicking things off," said IG analyst Alastair McCaig.

"The overnight figures from China have shown that it has managed to remain on the side of growth." China said its official PMI came in at 50.1 last month, up from 49.9 in February and the first result since December above the crucial 50-point level.

The figure came as welcome news after a string of weak data that have reinforced concerns about a slowdown in the Chinese economy and led to two interest rate cuts by the country's central bank.

In reaction to the data, Hong Kong stocks won 0.73 per cent and Shanghai soared 1.66 per cent.

Other Asian markets however retreated on Wednesday after losses on Wall Street, with Tokyo also hurt by a disappointing reading of Japanese business confidence.

Wall Street traded on the back foot following disappointing US hiring figures for March.

The Dow Jones Industrial Average shed 0.57 per cent to stand at 17,674.13 points in midday trading. Meanwhile the broad-based S&P 500 slid 0.47 per cent to 2,058.13 points, and the tech-rich Nasdaq Composite Index fell 0.67 per cent to 4,868.27 points.

Meanwhile on Wednesday, Athens continued tough talks with its creditors on a disputed list of reforms.

"There was a bit of a wobble (in European stocks) on the news Greece may be attempting to delay its IMF debt payment due next week but foggy-sounding denials from Athens alleviated some of the concerns," said analyst Jasper Lawler at CMC Markets UK.

Experts from the International Monetary Fund and the European Union are scrutinising a list of economic reforms proposed by Athens in a bid to unlock another 7.2 billion euros (US$7.8 billion) in loans to stave off possible bankruptcy and a euro exit.

Athens stocks fell 1.3 per cent to 765.37 points.

A deal on Greece's bailout is possible before the end of April, EU Council President Donald Tusk said.

Greece says the reforms would help raise an extra three billion euros for government coffers without resorting to wage and pension cuts.


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