Eurozone PMI confirmed at 6-year high
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European stocks closed higher on Thursday, breaking a five-day losing streak as investors welcomed a rally in oil prices and continued to follow developments in the U.K. election campaign.
The Stoxx Europe 600 index gained 0.4% to finish at 391.66, after closing at the lowest level in almost two weeks on Wednesday.
The positive trading mood in Europe came "with focus on Thursday remaining on the U.K. election, as well as the latest oil inventory data from EIA and a raft of other data from around the globe," Craig Erlam, senior market analyst at Oanda, said in a note.
Oil prices rallied (http://www.marketwatch.com/story/oil-rebounds-after-api-report-but-analysts-have-little-faith-in-gains-2017-06-01) after a report late Wednesday from the American Petroleum Institute showed U.S. crude supplies a more-than-expected 8.7 million barrels last week. That sparked hope the official data from the U.S. Energy Information Administration also would show a drawdown in inventories, and the EIA release did in fact reveal that (http://www.marketwatch.com/story/eia-reports-8th-straight-weekly-drop-in-us-crude-supplies-2017-06-01).
In Europe, shares of some oil-related companies were boosted by the jump in oil prices, which recently were up more than 1%. Shares of TechnipFMC PLC (FTI.FR) gained 1.6%, and Eni SpA (ENI.MI) rose 1.2%. But Total SA (TOT) (TOT) closed 0.2% lower after early gains evaporated.
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U.K. election nerves: Meanwhile in the U.K., all eyes were on opinion polls ahead of the June 8 election. A YouGov survey for The Times newspaper out late Wednesday showed a three-point lead for the ruling Conservative Party over the opposition Labour Party. That marks a big shift from the 20-point advantage the Conservatives had in April when the election was announced.
The pound traded as low as $1.2830, but was recently at $1.2892, essentially unchanged from $1.2891 late Wednesday in New York. Sterling's struggles helped boost the U.K.'s FTSE 100 index , which closed 0.3% higher at 7,543.77.
Other indexes: Elsewhere, Germany's DAX 30 index jumped 0.4% to finish at 12,664.92, while France's CAC 40 index put on 0.7% to end at 5,318.67.
Movers: Shares of Johnson Matthey PLC (JMAT.LN) (JMAT.LN) fell 0.7% even after the specialty chemicals company posted a rise in full-year pretax profit. Analysts said the company's outlook for the current fiscal year was a bit lower than expected.
Banco Popular Español SA (POP.MC) tanked 18%. Reuters reported that a top EU watchdog warned the Spanish bank it will have to be wound (https://www.reuters.com/article/us-banco-popular-m-a-eu-exclusive-idUSKBN18R25V) down unless it finds a buyer.
Economic data: Growth in the U.K. manufacturing sector slowed down in May, with the purchasing managers index for the sector slowing to 56.7 from April's three-year high of 57.3. A reading above 50 signals expansion.
The final eurozone manufacturing PMI confirmed the flash estimate of 57.0, marking a 73-month high. The index came in at 56.7 in April.
"The eurozone upturn is developing deeper roots as factories enjoy a spring growth spurt," said Chris Williamson, chief business economist at IHS Markit, in a note.
"The fact that the upturn is being accompanied by such strong jobs growth sends a signal that increasing numbers of companies are moving away from a focus on cost-cutting toward investing in expansion," he added.
(END) Dow Jones Newswires
June 01, 2017 12:44 ET (16:44 GMT)