Markets in Europe get early boost

Manufacturing figures hit long-time high in December

EUROPEAN equities got off on the right foot in the new year, pushed higher yesterday by a stellar set of data confirming eurozone manufacturing growth at a 68-month high. With London and major Asian and US markets, as well as the JSE, still closed, trading was light.

But sentiment was brightened by final results of manufacturing surveys last month.

They 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.

IHS Markit chief European and UK economist Howard Archer tweeted that the figure boosted hopes GDP growth might have reached 0.5% in the final quarter of last year.

Eurozone growth came in at 0.3% quarter on quarter in the third quarter.

Germany’s DAX 30 index was 0.9% higher in early afternoon trading, while the CAC 40 in Paris added 0.5%.

Manufacturing in the Netherlands and Austria were also at 68-month highs, with France close behind at a 67-month high.

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 last month, and Italian manufacturing hit a six-month high despite 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 positive, with shares in Banco BPM climbing 7.1% in their first day of trading.

The lender, now Italy’s third largest, came into being over the weekend with the finalisation of the merger.

Milan’s FTSE MIb index was up 1.5% in afternoon trading.

China’s official PMI, released on Sunday, showed manufacturing activity slowed slightly last month as the world’s second-largest economy stabilised.

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