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European stocks rise and sterling hits an 11-month high

European stocks rise and sterling hits an 11-month high

LONDON: Upbeat economic news helped push European stock markets higher on Thursday, while stronger-than-expected data in Britain drove sterling to an 11-month high ahead of a Bank of England monetary policy decision.

European equity markets gave up early falls to nudge into positive territory, with stock markets in Italy and France 0.2% to 0.3% higher. Britain’s blue-chip FTSE was also marginally higher, although Germany’s main stock index was a touch lower. “After some symbolic moves in US markets, we have taken a break but some European markets, such as Italy, are doing really well thanks to a plethora of good news,” said Kathleen Brooks, research director at City Index. On Thursday, data showed Italy’s service sector posted its fastest growth for a decade in July, boosting prospects for economic output in the eurozone’s third-largest economy. Other data showed retail sales in the eurozone increased by 0.5% in June on the month, well above market expectations of a 0.1% rise. Shares in Italy’s largest bank UniCredit climbed almost 5% after reporting forecast-beating profits for the second quarter, while British retailer Next jumped 9% after returning to sales growth in its latest quarter.

The positive earnings news helped lift sentiment in European equity markets, allowing them to recover from early falls as investors took profits on strong gains after the Dow Jones Industrial Average broke the 22,000-point barrier for the first time in its 121-year history, on Wednesday. Trade in US stock market futures pointed to a flat open on Wall Street later in the day. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7% and South Korea’s tech-heavy Kospi index slumped 1.7% to its lowest level in more than three weeks. Seoul shares took an additional hit from President Moon Jae-in’s new tax plan. Japan’s blue-chip Nikkei stock index closed down 0.3%.