European shares rose on Thursday as investors reviewed economic data from major European economies and awaited the start of the Federal Reserve's Jackson Hole conference later in the day. The pan-European STOXX 600 index increased by 0.5 per cent to 516.29 points.
The flash purchasing managers' index (PMI) for the eurozone showed unexpected strength in business activity for August, rising to 51.2, despite firms raising prices. France’s PMI jumped to a 27-month high of 55.0, driven by a boost from the Olympics, exceeding forecasts. This led the French benchmark CAC 40 up by 0.3 per cent. In contrast, Germany’s business activity contracted for the second consecutive month, with the PMI data showing a larger-than-expected decline. The German benchmark DAX remained unchanged, trading at 0.2 per cent. Britain’s PMI was at 53.4, indicating accelerated business activity, and the FTSE was up by 0.3 per cent.
Consumer confidence data for the eurozone, US PMI, and initial jobless claims figures, all due later in the day, will also be closely watched. The Nasdaq rose nearly 0.6 per cent overnight, buoyed by the Fed's July meeting minutes that hinted at a potential rate cut in September. Markets are now awaiting further details on the cut's size at the Jackson Hole conference, which begins later today. Chair Jerome Powell will deliver the keynote speech on Friday.
"Don't expect any surprises from Jackson Hole. There's already been enough communication leading up to it. The last thing they want to do is shock the market," said Daniel Morris, chief market strategist at BNP Paribas Asset Management. Regarding European equities, Morris added, "It's still a slightly disappointing recovery. It's harder to see Europe stocks outperforming US equities or the rest of the world."
The retail sector led gains, driven by a 4.8 per cent increase in JD Sports after the British sportswear retailer reported improved second-quarter underlying sales growth. Energy stocks fell by 0.3 per cent as oil prices dropped for the fifth session, with investors concerned about global demand. Among individual stocks, Aegon lost 4.7 per cent after reporting a decline in its key capital generation metric for the first half of the year. CTS Eventim surged 7.8 per cent after raising its full-year earnings forecast.— Reuters
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