European stocks advanced, erasing earlier losses, after Italy’s better-than-expected economic data helped confirm a trend of stronger manufacturing in the euro area.
The Euro Stoxx 50 index was 0.4 per cent higher as of 9:40 a.m. in London, while the UK and Swiss markets remained closed for a holiday. The DAX index in Germany, the region’s biggest economy, jumped 0.8 per cent and headed for its best day in almost three weeks.
The Stoxx Europe 600 Index was up 0.5 per cent, after slipping 1.2 per cent in 2016, underperforming the S&P 500 index in the US, which gained 9.5 per cent from 2015.
Italy’s FTSE MIB was up 1.3 per cent Monday. Data showed the country’s manufacturing PMI rose to 53.2 for December versus 52.2 in November, while economists expected 52.3. The FTSE MIB had ended 2016 down 10 per cent, hurt by political uncertainties as well as investor concern over the strength of the country’s banking system.
German shares were led by gains in lender Commerzbank AG and utility RWE AG. A report showed manufacturing PMI reached 55.6 in December, the highest reading since January 2014.
Euro-area manufacturing expanded last month at the fastest rate since April 2011, in a sign that the currency bloc’s recovery was intact heading into 2017.
Bloomberg
