Business
Business

Global shares rise on recovery hope

New York traders
Image caption US shares have recovered after falls in late trading on Wednesday

Stock markets have risen after encouraging service and manufacturing data in Europe boosted confidence in the global economic recovery.

The closely-watched purchasing managers index rose to 56.7 in July from 56 in June, a bigger-than-expected jump.

US stocks closed up 2% in morning trade, while Paris closed 3% and Frankfurt 2.5% higher, with London gaining 1.9%.

The news came as a contrast to downbeat comments by the US Federal Reserve's Ben Bernanke on Wednesday.

The Dow Jones index fell 1% in Wednesday's session after Mr Bernanke warned that the country's economic outlook remained "unusually uncertain".

He said record low interest rates would still be needed to support the economic recovery.

'Good start'

Both constituents of the PMI index, compiled by data provider Markit, rose in July.

The service sector index rose to 56 from 55.5 in June, while the manufacturing index rose from to 56.5 from 55.6. Any score over 50 indicates growth.

Market Data - BBC News

Market Data

Share Prices

Markets

UK markets
UK markets % change Value
Change
-0.12%
7602.61
-9.03
+0.13%
20536.52
+26.76
Europe markets
Europe markets % change Value
Change
+0.01%
561.56
+0.08
-0.01%
5402.96
-0.45
+0.21%
12384.53
+25.66
+0.09%
3412.37
+2.93
-0.40%
9468.70
-38.30
US markets
US markets % change Value
Change
+0.45%
25299.92
+112.22
+0.65%
7870.89
+51.19
+0.64%
2839.96
+18.03
Asia markets
Asia markets % change Value
Change
+0.55%
37852.00
+207.10
-1.55%
27323.59
-429.34
-0.68%
22204.22
-151.86
As of 09:25 15 Aug 2018

Currencies

GBP
% change One £ buys
Change
GBP against Euro
+0.12%
€1.1225
+0.0010
GBP against Yen
+0.06%
¥141.4350
+0.0800
GBP against USD
-0.07%
$1.2711
-0.0010
USD
% change One $ buys
Change
USD against Euro
+0.18%
€0.8833
+0.0020
USD against GBP
+0.06%
£0.7868
0.0000
USD against Yen
+0.12%
¥111.2800
+0.1300
Euro
% change One € buys
Change
Euro against GBP
-0.09%
£0.8911
-0.0010
Euro against Yen
-0.06%
¥125.9950
-0.0800
Euro against USD
-0.15%
$1.1327
-0.0020
Yen
% change One ¥ buys
Change
Yen against Euro
+0.06%
€0.0080
0.0000
Yen against GBP
-0.06%
£0.0070
0.0000
Yen against USD
-0.12%
$0.0090
0.0000
As of 09:25 15 Aug 2018

Commodities

Oil
Commodity % change dollars per barrel
Change
Brent Crude Oil Futures
-1.09%
71.67
-0.79
WTI Crude Oil Futures
-1.24%
66.21
-0.83
Gold
Commodity % change dollars per ounce
Change
Gold (Forex Index am fix)
-0.76%
1195.30
-9.10
Gold (Forex Index pm fix)
-0.28%
1197.00
-3.35
Natural Gas
Commodity % change dollars per million BTU
Change
Natural Gas (Henry Hub Futures)
-0.42%
2.95
-0.01
As of 09:26 15 Aug 2018

"We were very surprised, it's a good start to the second half of the year," said Chris Williamson at Markit.

The euro also benefited from positive sentiment, rising 1.5 cents against the dollar to $1.2903. The pound was less badly affected by the single currency's strength and was down only marginally, buying 1.1836 euros on the money markets.

Earlier, shares in Tokyo closed lower after the Fed chairman's comments on the US economy, and there had been fears that European stocks would follow suit.

However, the PMI data boosted "hopes that the eurozone will see decent growth in the third quarter after a likely marked pick-up in the second quarter", said Howard Archer at IHS Global Insight.

But despite the short-term optimism, both Mr Williamson and Mr Archer warned that economic growth in Europe could slow in the coming months.

Market Data - BBC News

Market Data

Share Prices

Markets

UK markets
UK markets % change Value
Change
-0.12%
7602.61
-9.03
+0.13%
20536.52
+26.76
Europe markets
Europe markets % change Value
Change
+0.01%
561.56
+0.08
-0.01%
5402.96
-0.45
+0.21%
12384.53
+25.66
+0.09%
3412.37
+2.93
-0.40%
9468.70
-38.30
US markets
US markets % change Value
Change
+0.45%
25299.92
+112.22
+0.65%
7870.89
+51.19
+0.64%
2839.96
+18.03
Asia markets
Asia markets % change Value
Change
+0.55%
37852.00
+207.10
-1.55%
27323.59
-429.34
-0.68%
22204.22
-151.86
As of 09:25 15 Aug 2018

Currencies

GBP
% change One £ buys
Change
GBP against Euro
+0.12%
€1.1225
+0.0010
GBP against Yen
+0.06%
¥141.4350
+0.0800
GBP against USD
-0.07%
$1.2711
-0.0010
USD
% change One $ buys
Change
USD against Euro
+0.18%
€0.8833
+0.0020
USD against GBP
+0.06%
£0.7868
0.0000
USD against Yen
+0.12%
¥111.2800
+0.1300
Euro
% change One € buys
Change
Euro against GBP
-0.09%
£0.8911
-0.0010
Euro against Yen
-0.06%
¥125.9950
-0.0800
Euro against USD
-0.15%
$1.1327
-0.0020
Yen
% change One ¥ buys
Change
Yen against Euro
+0.06%
€0.0080
0.0000
Yen against GBP
-0.06%
£0.0070
0.0000
Yen against USD
-0.12%
$0.0090
0.0000
As of 09:25 15 Aug 2018

Commodities

Oil
Commodity % change dollars per barrel
Change
Brent Crude Oil Futures
-1.09%
71.67
-0.79
WTI Crude Oil Futures
-1.24%
66.21
-0.83
Gold
Commodity % change dollars per ounce
Change
Gold (Forex Index am fix)
-0.76%
1195.30
-9.10
Gold (Forex Index pm fix)
-0.28%
1197.00
-3.35
Natural Gas
Commodity % change dollars per million BTU
Change
Natural Gas (Henry Hub Futures)
-0.42%
2.95
-0.01
As of 09:26 15 Aug 2018

Continuing fears

Investors are awaiting the results of the European bank stress tests that will be published on Friday evening.

These should reveal the capital strength of Europe's leading banks, including the extent of bad loans that remain on their books following the financial crisis.

The results will help determine the mood of investors next week.

However, there are fears that the results will not allay concerns about the strength of the banking sector.

If too many banks fail, investors will be concerned about the banks' ability to withstand future shocks to the financial system.

But if too many pass, analysts say, then questions will be raised about whether the tests were stringent enough.

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