Market update: European stocks mixed ahead of US manufacturing report – 03.09.2013

Source: Henderson Global Investors

US markets were closed yesterday for the Labor Day holiday.

In Asia, the Nikkei was the strongest market today, finishing 3% higher. Investors were buoyed by comments from Japan’s finance minister that the government will proceed with sales tax hikes from next year, a key part of prime minister Abe’s fiscal reform strategy. Over in China, the official service sector purchasing managers’ index dipped slightly in August, from 54.1 a month ago to 53.9. Nonetheless, this still represents steady growth in the sector. A reading above 50 denotes sector expansion.

European markets are mixed with the FTSE Eurofirst 300 flat and the FTSE 100 both down 0.2% ahead of today’s release of August US manufacturing data. The data is an important factor in the Federal Reserve’s decision on when to slow its bond purchases programme. The Fed’s next policy meeting is on 17-18 September. Also lifting markets is yesterday’s news that the eurozone manufacturing sector recovery continues. The Markit Purchasing Managers' Index rose to 51.4 in August; growth is more broad-based with only France’s manufacturing sector failing to expand.

In stock news Vodafone is down this morning following yesterday’s 3.4% gain as Verizon Communications agreed to acquire the former’s 45% stake in Verizon Wireless. The deal is the third largest in corporate history. Meanwhile, Nokia’s shares soared almost 40% following the deal with Microsoft to buy its handset business for €5.4bn.