Euro zone stocks edged higher during the course of Monday’s session for those markets that were open, with Italy’s FTSE MIB climbing to 1.21%, while Germany’s DAX rose 0.86% and France’s CAC gained 0.35%.
However, volume shares traded thinner with several major markets, including the UK, closed for the New Year holiday.
Markets in the U.S. and Canada were also set to be closed Monday.
European Stocks Advances in Manufacturing
Stocks have increased in the first session of the year after the manufacturing sector has rapidly expanded since April 2011.
European rallied, erasing earlier losses, after Italy posted a better-than-expected economic data, which has confirmed a stronger manufacturing trend in the euro zone.
The Euro Stoxx 50 index was up 0.4 percent in London, while the UK and Swiss markets were closed for the New Year holiday. Meanwhile, Germany’s DAC climbed 0.8 percent and made its way to the gainers of the day in almost three weeks.
The Stoxx Europe 600 index rose 0.5 percent, after posting losses of 1.2 percent in 2016, underperforming the S&P 500 index in the US, which added 9.5 percent from 2015.
Meanwhile, FTSE MIB rose 1.3 percent on Monday’s close, after data showed a better-than-expected manufacturing PMI of 53.2 in December, compared to a 52.2 in November. Additionally, economists’ were expecting a 52.3 manufacturing PMI data.
The FTSE MIB had finished 2016 down by about 10 percent due to heightened uncertainties, including investors’ concern over the strengthening banking system of the country.
Euro Manufacturing Sectors Increases
Ahead of the better-than-expected manufacturing PMI data, it appeared that the manufacturing growth of the country hit its highest in almost three years, boosted by increasing demand from Asia and the U.S. French manufacturing, which reached a five-and-a-half-year high, and Italian manufacturing activity, which grew at a faster pace since June.
Chief economist Koen De Leus said: “It’s nice to see some good economic numbers on the first trading day of the new year. It has improved sentiment and could help the market to set new highs in the coming months.
“However, the road ahead looks bumpy because of several political risks in Europe. Overall, I am positive on European stocks this year as valuations are quite attractive compared to the United States and company margins are slowly improving, helped as well by the cheap euro.”
As stocks in the euro zone is currently showing bulls, market participants still need to wait on the sidelines until a trend confirmation show.
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