European rose for the first time in three days on Wednesday. The Euro Stoxx 50 index rose to 3458, its highest since Monday. Stocks in the UK pulled off three-week lows but remained below yesterday’s high. The FTSE 100 rose as high as 6,327.
Having avoided any large sell-off in the wake of poor Chinese economic data this week, markets have been able to look through weakness in the country’s industrial sector reported on Wednesday. Chinese Industrial production grew at a slower than expected 5.3% year-over-year. Appropriately on “Singles Day”, the country’s biggest shopping day, Chinese retail sales were reported to have grown 11%, the highest rate this year. China’s authorities will likely be pleased domestic demand is improving in the face of slower demand for its more export-sensitive manufactured goods.
A catalyst for the first rise for stocks in three days was European Central Bank governing council member Ignazio Visco reiterating that a change in the bank’s asset purchase program and/or a lowering of the deposit rate will be considered in order to meet its inflation target.
The British pound slipped slightly after the ONS reported slower than expected wage growth but remained higher on the day, supported by data showing 5.3% unemployment, the lowest rate since April 2008. BOE governor Carney is hosting the ‘Bank of England Open Forum.’
SABMiller PLC (L:SAB) was a top riser on the FTSE after the brewer announced it had finally agreed a formal offer from Inbev (L:0O1Z) of £44 per share totalling £71bn. Sector peer Diageo (L:DGE) was higher in tandem on expectation of further consolidation within the drinks market.
Shares of Sainsbury (L:SBRY) saw gains in line with the overall market after reporting an 18% drop in first-half profits. It’s the worst set of results since 2010 but sales growth in the supermarket’s ‘TU’ clothing and ‘Taste the difference’ food ranges made them better than expected and that supports the turnaround strategy put in place by chief executive Mike Coupe.
Trading may be quiet in US markets on Veteran’s Day since bond markets are closed, while stock markets are expected to see a higher open.
USA pre-opening levels
S&P 500: 4 points higher at 2,085
Dow Jones: 34 points higher at 17,792
Nasdaq 100: 15 points higher at 4,656
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