Europe midday: Stoxx holds gains despite growth worries after PMI prints

23rd Sep 2024 11:27

(Sharecast News) - European stock markets were up at midday as investors digested eurozone survey results, while Commerzbank shares were in focus after the German government decided to keep its stake in the lender.

The pan-regional Stoxx 600 index was up 0.18% in early trade at 515 with major bourses mixed. Germany's DAX outperformed with a 0.42% rise.

In economic news, business activity across the eurozone unexpectedly contracted this month, according to preliminary estimates released on Monday by S&P Global and Hamburg Commercial Bank, marking the first decline in seven months due to a sustained reduction in new orders.

The eurozone composite purchasing managers' index (PMI), which tracks both the manufacturing and services sectors, dropped to 48.9 in September, down from 51.0 in August and below the key 50-point level which separates contraction and expansion.

This was the lowest reading since January and well below the consensus estimate of 50.6.

"A mixed start for European markets has seen the DAX lead the way despite widespread concern over the direction of travel for the eurozone economy," said Scope Markets analyst Joshua Mahony.

"A raft of PMI surveys released over the course of the morning cast a shadow over the recovery hopes of the eurozone, with services and manufacturing surveys released throughout the French, German, and eurozone economies all reversing lower for the month of September."

"The 40.3 manufacturing release for Germany brings particular concern, highlighting a major recession risk for the European industrial powerhouse."

Meanwhile, China's central bank unexpectedly lowered its key 14-day reverse repo rate by 10 basis points in an attempt to encourage banks to lend more freely.

In equity news, Commerzbank shares fell more than 3.5% after the German government said it would keep its stake in the bank for now, in a move that dented hopes of a merger with Italy's UniCredit.

BNP Paribas fell after announcing a deal to buy HSBC's private banking unit in Germany, which it expected to be finalised in the second quarter of 2025.

Australian property listing firm REA Group sweetened its offer for UK rival Rightmove with a £6.1bn offer sending Rightmove shares higher.

AstraZeneca fell as the pharma giant said its experimental precision drug developed with Daiichi Sankyo did not significantly improve overall survival for patients with a type of breast cancer in a late-stage trial.

Reporting by Frank Prenesti for Sharecast.com