European stocks closed higher on Wednesday. The euro weakened against the dollar as the ADP report showed the private sector in US added more jobs than expected and disinflation set in euro-zone with inflation reading coming in at negative 0.1% for September. The Stoxx Europe 600 index gained 2.5% to 344.71, rebounding from 2.9% loss over the last two trading days on concerns about China’s slowing economy. Euro-zone unemployment edged higher to 11% in August from 10.9% the previous month. Deteriorating employment and inflation point to likelihood of monetary stimulus program expansion by the European Central Bank. Nevertheless, on Tuesday ECB Governing Council member Jens Weidmann said the euro-zone’s economic recovery has firmed, unlike in January when the ECB was debating quantitative easing. Today September final Manufacturing PMIs for France, Germany and euro-zone were released. The euro-zone PMI reading came in unchanged at 52.0 while German’s PMi was revised downward to 52.3 from 52.5, and the final reading for France was revised upward to 50.6 from 50.4. Today at 10:30 CET September Manufacturing PMI will be published in UK. The tentative outlook is negative.
Nikkei rose 1.9% today as investor optimism was buoyed by the report on China’s manufacturing activity which showed China’s official PMI edged higher in September to 49.8 from 49.7. Market participants attributed the rally partly to purchasing by various pension funds at the start of the second half of fiscal year. Exporters outperformed, with Toyota Motor Corp shares climbing 2.6% and Nissan Motor Co gaining 5.1% after Credit Suisse had its stock rating upgraded to 'outperform' from 'neutral'.
Oil futures prices are rising today after a report by Joint Oil Data Initiative indicated world oil demand increased in the first six months this year against the same period in 2014 as crude oil prices fell by as much as half in many countries.
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