Monday, September 03 16:51:16
European stocks ended higher today, extending the previous session's rally as investors' expectation of further stimulus measures from central banks overshadowed grim manufacturing data from China.
The FTSEurofirst 300 index of top European shares unofficially ended 0.7 percent higher at 1,090.50 points, while the euro zone's blue chip Euro STOXX 50 index added 0.8 percent, to 2,459.84 points. Trading volumes were muted as U.S. markets remained closed for a public holiday.
The rally was broad based, with French pharma group Sanofi adding 2 percent and Italian lender UniCredit gaining 1.7 percent.
The final reading of the HSBC China manufacturing purchasing managers' index (PMI) for August fell to a seasonally adjusted 47.6, its lowest level since March 2009, signalling that the pace of growth in the world's second-biggest economy will weaken well into the third quarter.
Data also showed the euro zone manufacturing sector contracted faster than previously thought last month, despite factories cutting prices, as core countries failed to provide any support.
Investors, however, continued to focus on this week's European Central Bank policy meeting, during which it is expected to unveil details of a plan to buy bonds from Spain and Italy to lower the two countries' borrowing costs and ease the region's debt crisis.
Despite Monday's gains, Francois Chevallier, strategist at Banque Leonardo, warned that equities will struggle to extend their rally started in late July.
"The risk is now on the downside, if investors are disappointed by the central bank's programme or the conditions attached to it," he said. (C ) Reuters