Market Snapshot

European Stocks Mixed on UK PMI Data Miss, Eurozone Surprise


Last updated: 01/24/2023 12:47:50

12:47 PM EST, 01/24/2023 (MT Newswires) -- European stocks closed mixed Tuesday as latest data showed an unexpected resiliency in many economies in the region, while reinforcing expectations of further rate hikes.

The Stoxx Europe 600 was down 0.17%, London's FTSE 100 lost 0.35% and Germany's DAX fell 0.07%. On the other hand, the Swiss Market Index was flat and France's CAC 40 edged up 0.26%.

S&P Global said the euro area's flash composite and services sector PMIs for January climbed out of the contraction zone and higher than estimates, while the manufacturing sector's flash PMI remained in the contraction zone but was also better than expected.

"The region is by no means out of the woods yet, however, as demand continues to fall - merely dropping at a reduced rate - and an upturn in the rate of inflation of selling prices for both goods and services will add encouragement to the hawks to push for further monetary policy tightening," S&P Global Market Intelligence chief business economist Chris Williamson said.

"The case for higher interest rates is fueled further by the upturn in employment growth recorded during the month and signs of higher wages driving the latest upturn in price pressures."

UK data, on the other hand, painted a different story for the manufacturing and services sectors. The January flash services PMI fell to a two-year low, while the manufacturing PMI is still well in the contraction zone but touched a four-month high.

Associated British Foods (ABF.L) shares were down 2% as it took a cautious stance for FY23 despite recording a 16% increase in group revenue for the 16 weeks ended Jan. 7. The company, which owns clothing retailer Primark, said it expects that for the year ending September, sales will grow significantly but adjusted operating profit and EPS will fall from the previous year.
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