Eurozone equities advance on positive data

euroLONDON: Eurozone stock markets marched higher Monday following bright economic data, showing business activity in October at a 10-month high.

Frankfurt gained 0.8 percent in value and Paris won 0.7 percent. London meanwhile London erased earlier gains to trade virtually flat around midday compared with Friday’s closing level.

“A positive swell of data has continued to boost the eurozone,” said analyst Connor Campbell at trading firm Spreadex.

Eurozone business activity picked up strongly this month, recovering from a dip in September, as economic powerhouse Germany led the way, a closely watched survey showed Monday.

Data monitoring company IHS Markit said the October figures were encouraging, after months where the economy has bumped along the bottom and was then badly rattled by Britain’s shock vote in June to exit the European Union.

It said its preliminary October Composite Purchasing Managers Index (PMI) for the 19-nation euro area jumped to 53.7 points from 52.6 in September.

The PMI measures companies’ readiness to spend on their business and so gives a good idea of how the underlying economy is performing.

“The eurozone… went from strength to strength, the DAX and CAC now up just shy of 1.0 percent, thanks to a series of sharp recoveries in the region’s manufacturing and services PMIs,” added Campbell.

“Following on from the impressive readings out of Germany and France, the eurozone-wide composite PMI (showed)… the region’s firms putting Brexit firmly behind them.”

In Asia meanwhile, Shanghai led a broad rally on hopes China will unveil fresh economy-boosting measures.

Chinese growth has levelled out this year after a painful slowdown, but there are hopes officials will push on with spending measures and reforms, particularly of giant state-owned firms.

The upbeat outlook helped push Shanghai up 1.2 percent by the close, while Hong Kong was one percent higher.

In Seoul, troubled shipping company Hanjin collapsed almost 12 percent after it said it would close its European business.

The firm said it had applied for court approval to close all of its European units in more than 10 countries including Germany, where it has regional headquarters.

World oil prices staged a modest retreat after Iraq’s oil minister said that it should be exempted from OPEC’s planned output cut because it is waging a war with Islamic State jihadists.

“Oil prices slipped on Monday as Iraq indicated that it wished to be exempt from any upcoming OPEC production cut,” said Wayne Heap of British-based broker Love Energy.

“Without the support of their second largest producer, OPEC may struggle to hit the reductions in output that they are aiming for.”