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European Stocks Moving Higher On Strong Data From China, Germany

stockmarkets aug15 15sep20 lt

European stocks are firmly up in positive territory Tuesday afternoon after opening on a somewhat cautious note.

Ignoring concerns about rising coronavirus cases for now, investors are picking up stocks thanks to strong industrial production and retail sales data from China. Data showing an improvement in German economic confidence in September is helping as well.

Global cues are positive too, with Asian markets closing mostly higher and U.S. futures moving up.

On the Brexit front, British MPs passed the Internal Market Bill in the House of Commons by 340 to 263 votes on Monday. The Bill will now go to the upper chamber, the House of Lords.

Markets are also looking ahead to monetary policy announcements from central banks. While the Federal Reserve is scheduled to announce its policy on Wednesday, the Bank of England and the Bank of Japan will be coming out with their policy statements on Thursday.

The pan European Stoxx 600 was up 0.71% by about an hour past noon. The U.K.'s FTSE 100 was gaining more than 1% early afternoon. Germany's DAX was up 0.32% and France's CAC 40 was stronger by 0.5% an hour past noon. Switzerland's SMI surged up 0.87%.

In the U.K. market, Ocado Group shares soared nearly 10%, lifted by strong quarterly sales. Meggitt, Royal Mail, British Land Company, Glencore, Rio Tinto, AstraZeneca, Intercontinental and BAE Systems were up 2.5 to 5%.

On the other hand, Polymetal International, Carnival, Kingfisher, Antofagasta, IAG, Rolls-Royce Holdings, Standard Chartered and TUI were down sharply.

In Germany, Bayer was moving up more than 3%. HeidelbergCement rose nearly 2.5%, while Covestro gained 1.7%. BMW, Henkel and Fresenius Medicare were also up with notable gains, while Wirecard and Lufthansa were lower by 3.2% and 1.1%, respectively.

In the French market, Peugeot gained about 4.5%. Kering, Hermes International and Sanofi were up 1.8 to 2%, and LVMH advanced 1.2%. Carrefour and Airbus were down nearly 2% and 1.8%, respectively.

In economic news, German economic confidence strengthened unexpectedly in September, survey data from the ZEW - Leibniz Centre for European Economic Research showed. The economic confidence index rose unexpectedly to 77.4 in September from 71.5 in the previous month. The reading was forecast to fall to 69.8.

The current conditions index advanced to -66.2 from -81.3 a month ago. The expected level was -72.0.

Sentiment concerning the economic development of the Eurozone increased by 9.9 points to 73.9 points in September. Likewise, the indicator for the current economic situation climbed 8.9 points to minus 80.9 points.

Data from the Office for National Statistics said UK payroll employment declined and the unemployment rate advanced in three months to July. According to the data, the jobless rate was 4.1% in three months to July, which was 0.2 percentage point higher than the previous quarter. The rate came in line with expectations.

Further, average earnings including bonus decreased 1% in May to July, while excluding bonus, regular pay gained 0.2%.

Data also showed that claimant count rose by 73,700 in August from the previous month to 2.7 million. The expected rise was 100,000.

Meanwhile, a report from the Federal Statistical Office showed Switzerland's producer and import prices declined in August, falling 3.5% year-on-year.

The producer price index fell 2.2% annually in August and import prices decreased 6.1%. On a monthly basis, producer and import prices fell 0.4% in August.

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