Europe open: Stocks snap three-day losing streak ahead of US data

1st Nov 2024 08:13

(Sharecast News) - European stocks rebounded on Friday as investors went bargain hunting with markets at an 11-week low, amid optimism that China's economy is showing tentative signs of a recovery.

The Stoxx 600 was up 0.4% at 507.57 by 0947 CET, snapping a three-day losing streak which sent the index to its lowest level since 14 August after a barrage of blue chip earnings from across the continent disappointed.

Lifting sentiment early on was a second survey in as many days from economic powerhouse China which showed that its heavyweight manufacturing sector returned to growth last month.

The Caixin China manufacturing PMI rose to 50.3 last month from 49.3 in September, beating the 49.7 consensus forecast, as new orders increased at their fastest pace in four months and optimism among manufacturers rose to a five-month high.

On Thursday, the official manufacturing PMI from the National Bureau of Statistics pushed above the neutral 50-point level for the first time in six months, after a barrage of stimulus measures announced by the government in September started to take effect.

With a quiet economic data calendar in Europe, Friday's session will be dominated by the release of the US non-farm payrolls report in the US, which is forecast to show that job creation slowed to 113,000 in October after September's bumper reading of 254,000, though the market reaction will be difficult to predict, according to Kathleen Brooks, research director at XTB.

"The market is expecting a sharp slowdown in payrolls growth in October. [...] However, hurricanes and the Boeing strike are likely to sway these numbers, so traders may look through them. They also might not meaningfully impact next week's Fed decision," Brooks said.

Market movers

Reckitt Benckiser was up 10% after its subsidiary Mead Johnson was cleared of liability in a US trial investigating whether the company - alongside Abbott - hid bowel disease risks associated with premature-baby formula. With many similar lawsuits still pending, investors are hoping that any potential settlement costs won't be as bad as initially feared.

German food delivery firm HelloFresh also jumped 10% just one day after announcing plans to close a distribution site in the UK, putting 900 jobs at risk. The stock was pushed higher by positive comments from JPMorgan on Friday, which lifted its rating from 'neutral' to 'overweight'.

Also helped by broker commentary was UK asset manager Schroders which was supported by an upgrade to 'outperform' at BNP Paribas Exane.

Meanwhile, Danish shipping giant Maersk was extending gains made the previous day after reporting a huge jump in third-quarter profits.