Manufacturing Builds Gains For Eurozone Equities

PARIS, Jan 2, (UrduPoint / Pakistan Point News - 02nd Jan, 2017 ) - European equities got off on the right foot in 2017, pushed higher on Monday by a stellar set of data confirming eurozone manufacturing growth at a 68-month high.

With London and major Asian and US markets still closed for the New Year holiday, trading was light. But sentiment was brightened by final results of December manufacturing surveys that showed robust performances across most of the eurozone, where the uncertainty over the impact of Britain's exit from the EU has threatened a tepid recovery.

IHS Markit's final eurozone manufacturing PMI figure for December came at 54.9 points, up from 53.7 in November. With a result above 50 indicating expansion, the result was the best since April 2011.

The surveys of companies about their performance and outlook are an important early indicator of how economies are faring before official data is collected and processed. Howard Archer, chief European and UK economist at IHS Markit, tweeted that the figure "boosts hopes GDP growth may have reached 0.5 percent" in the final quarter of 2016.

Eurozone growth came in at 0.3 percent quarter-on-quarter in the third quarter. Germany's DAX 30 index was 0.9 percent higher in early afternoon trading, while the CAC 40 in Paris added 0.

5 percent.

Manufacturing in the Netherlands and Austria were also at 68-month highs, with France close behind at a 67-month high, according to IHS Markit. In another encouraging sign for France, which has been suffering from high unemployment, job creation was at its fastest rate since June 2011.

German manufacturing was at a 35-month high in December, and Italian manufacturing hit a 6-month high despite the political uncertainty linked to a change of government and a bank bailout. Italy's banking sector, which last month was gripped by anxiety over a state-backed bailout for a top lender, also started off on a positive note with shares in Banco BPM climbing 7.1 percent in their first day of trading.

The lender, now Italy's third largest, came into being over the weekend with the finalisation of their merger. Milan's FTSE MIb index was up 1.5 percent in afternoon trading. China's official PMI, released on Sunday, showed manufacturing activity slowed slightly in December as the world's second largest economy stabilised.

The 51.4 registered in December was a drop from 51.7 in November, which had marked its fastest growth for two years.