The FINANCIAL — European stocks rose Wednesday, tracking gains in Asia, on the back of some robust data on China’s services sector.
In early trade, the Stoxx Europe 600 rose 0.5%, having fallen slightly in the previous session as a result of lackluster corporate earnings.
In Asia on Wednesday, Japan’s Nikkei Stock Average rose 0.5% and South Korea’s Kospi gained 0.3%, according to Nasdaq.
The closely watched Caixin Services Purchasing Managers’ Index climbed to an 11-month high in July despite a steep selloff in China’s stock market, data showed Wednesday.
The services PMI rose to 53.8 for the month, up sharply from 51.8 in June. A reading above 50 indicates expansion from the previous month; below 50, contraction.
One of the biggest gainers on the pan-European index was Société Générale SA. Shares in the French bank added nearly 7% shortly after the market opened.
The lender said Wednesday that second-quarter net profit jumped 25%, lifted by the performance of its large equity and derivatives trading business and a debt-valuation adjustment.
In currency markets, the euro was 0.2% lower against the dollar in early European trade at $1.087.
The buck rose against both the euro and the yen late Tuesday after Federal Reserve Bank of Atlanta President Dennis Lockhart, who is a voting member on the Fed’s monetary-policy committee, raised expectations for an interest rate rise as early as September.
Deutsche Bank strategist Jim Reid wrote in a note to clients that this shows the Fed’s plans for an increase in rates have seemingly not been derailed by the recent commodity rout, concerns over China, “and the general disappointments over the state of the wider global recovery.”
Later in the day, investors will be paying close attention to the release of the latest estimate of the increase in private payrolls compiled by payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s Analytics. This will come out ahead of the Bureau of Labor Statistics’ employment situation report scheduled for Friday.
Valentin Marinov, a currency strategist at Crédit Agricole said that a strong reading would likely trigger a fresh rally in the dollar, especially against Japan’s yen, the Canadian dollar, the euro and the Swiss franc.
Brent crude was 0.9% higher in early trade at $50.44 per barrel. Gold was 0.3% lower at $1,087.00 per barrel.