By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets showed
broad-based gains on Thursday, after data showed a pickup in
manufacturing activity in both the euro zone and China.
The Stoxx Europe 600 index rallied 1% to 303.69, on track to
break a three-day losing streak.
Among notable movers in the index, shares of Royal Ahold NV
jumped 5.1% after the Dutch supermarket retailer reported a 3% rise
in second-quarter sales at constant exchange rates.
Shares of IMI PLC climbed 5% after the engineering group
reported an 8% rise in first-half profit and raised dividends
8%.
Banks were also higher, with shares of UniCredit SpA up 3.9% in
Milan, Commerzbank AG 3.5% higher in Frankfurt and HSBC Holdings
(HBC) rising 1.7% in London.
More good news from Europe
More broadly, the pan-European index was boosted by encouraging
macroeconomic data from the euro zone, showing business activity in
the region expanded at the fastest pace in more than two years in
August. The Markit preliminary composite purchasing managers' index
rose to a 26-month high of 51.7, up from 50.5 in July. A level
above 50 indicates expansion.
"So far, the third quarter is shaping up to be the best that the
euro area has seen in terms of business growth since the spring of
2011. The economic picture from the surveys is therefore coming
into line with policy makers' expectations of a modest, yet still
fragile, return to growth," said Chris Williamson, chief economist
at Markit, in the data release.
On a country-specific basis, data showed Germany's composite PMI
rose to a seven-month high, driven by the fastest rise in
manufacturing production for over two years. The readings in France
were more mixed, with the composite PMI dropping to a two-month low
of 47.9, while the manufacturing reading remained at 49.7.
Germany's DAX 30 index jumped 1.3% to 8,392.40, while France's
CAC 40 index gained 1.1% to 4,059.96.
Investors also welcomed upbeat data from China. The flash
reading of the country's manufacturing PMI, compiled by HSBC and
Markit, showed a rebound to a four-month high of 50.1 in August,
from a final reading of 47.7 in July, an 11-month low.
"The gap between the official and the HSBC readings that had
puzzled the market for four months was basically closed by this
surprising rebound. All major activity data are now moving in the
same direction, indicating a much-strengthened growth momentum in
Q3," said Yao Wei, China economist at Société Générale, in a
note.
Miners, which tend to rise on growth indications from China,
climbed after the data. Shares of Rio Tinto PLC (RIO) gained 1.9%
in London, and BHP Billiton PLC (BHP) added 2.1%.
The U.K.'s FTSE 100 index traded 0.9% higher at 6,447.68.
In the U.S., stock opend higher, after closing sharply lower on
Wednesday on the back of the release of minutes from the Federal
Reserve's July meeting.
"The minutes gave a slightly more cautious take on the outlook,
which could give the Fed more wiggle room to delay the start of
tapering from the September date consensus now expects," said
Robert Wood, chief U.K. economist at Berenberg in London, in a
note.
Data out of the U.S. on Thursday showed jobless claims rose by
13,000 to 336,000 last week, but remained near a postrecession
low.
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