British stocks fell on Monday, while the rest of Europe edged up, after solid economic data pushed up the pound, darkening the outlook for the country’s exporters. U.S. markets are closed for the Labor Day holiday.
KEEPING SCORE: In Europe, France’s CAC 40 edged up 0.3 percent to 4,555 while Germany’s DAX added 0.2 percent to 10,706. Britain’s FTSE 100 was 0.2 percent lower at 6,882.
BRITAIN HOLDS UP: Another survey of British economic activity provided further evidence that the British economy has held up better than many people expected following the June vote to leave the European Union. According to IHS Markit and the Chartered Institute of Procurement and Supply, the purchasing managers’ index for Britain — a broad gauge of economic activity — jumped to 53.2 points, reversing a record fall to 47.4 in July experienced after the June 23 referendum. The index is on a 100-point scale, with figures above 50 representing growth.
MARKET REACTION: The pound rose on the news, trading 0.2 percent higher at near seven-week highs of $1.3322. British stocks slipped as investors marked down export-oriented companies in light of the pound’s move. A higher pound makes their products more expensive in international markets.
ANALYST TAKE: “The latest reading negates some of the pessimism from the July reading, which sparked fears of a substantial slowdown in business activity following the EU referendum after showing the largest decline on record,” said David Cheetham, market analyst at XTB.
EUROPE SLOWING? An equivalent survey for the 19-country eurozone suggested that the region lost some economic momentum in August, largely because of a slowdown in Germany, a closely watched survey showed Monday. IHS Markit said its purchasing managers’ index for the eurozone fell to a 19-month low of 52.9 points in August from 53.2 the previous month. The fall was unexpected as the initial estimate for August was 53.3 and has stoked speculation that the European Central Bank will enact a further stimulus on Thursday at its regular policy meeting. That has helped shore up stocks across the eurozone.
ENERGY: Oil prices pushed ahead amid speculation of a production freeze after the world’s two largest oil producers, Russia and Saudi Arabia, agreed to act together to stabilize global oil output. It’s unclear what that may entail, though. Benchmark U.S. crude oil gained 79 cents to $45.23 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, the benchmark for international oil prices, rose 92 cents to $47.75 a barrel.
ASIA’S DAY: Japan’s Nikkei 225 added 0.7 percent to finish at 17,037.63. South Korea’s Kospi gained 1.1 percent to 2,060.08. Hong Kong’s Hang Seng rose 1.7 percent to 23,668.40, while the Shanghai Composite edged up nearly 0.2 percent to 3,072.10. Australia’s S&P/ASX 200 climbed 1.1 percent to 5,429.60.
CURRENCIES: The euro was down 0.1 percent at $1.1148 while the dollar fell 0.5 percent to 103.44 yen.
