European equity markets rebounded strongly today, supported by solid manufacturing PMI data from the UK and Eurozone, which improved market sentiment and increased risk appetite. The CAC, DAX and London benchmark gained between 0.7% and 0.87%, while the euro consolidated around 1.365 against the US dollar.
On the macroeconomic front, the Eurozone’s Markit Manufacturing PMI was reported at 51.8 in June, while the UK Markit/CIPS Manufacturing PMI jumped to 57.5 in June strongly beating analysts’ expectations of 56.8, expanding at the strongest pace in seven months. The Eurozone’s unemployment rate fell to 11.6% in May compared to 11.7% in April, driving the European currency higher this morning.
In the US, the economic data was fairly mixed as construction spending rose slightly by 0.1% in May, missing analysts’ expectations while the ISM manufacturing PMI was reported at 55.3 in June compared to expectations of 55.8.
In the London equity markets, financial and utility companies posted strong gains. British banks rebounded from yesterday’s losses and edged higher as risk appetite rose. HSBC, Lloyds and Barclays gained between 0.9% and 1.7%. Mining stocks also increased strongly as precious metal prices continued their uptrend. Anglo American, Fresnillo, Randgold, Rio Tinto and BHP Billiton surged higher between 2.25% and 4%.