EUROPE MARKETS: European Stocks Finished In The Green After Strong PMIs

By Sara Sjolin and Carla Mozee, MarketWatch Features Dow Jones Newswires

German election on Sunday is also in focus

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European stocks edged mostly higher Friday, with upbeat economic data helping the market to move past weakness stemming from the latest round of tensions between North Korea and the U.S.

The Stoxx Europe 600 index closed up by a slight 0.1% at 383.22, keeping intact a 0.7% weekly advance. The pan-European index on Thursday ended higher (http://www.marketwatch.com/story/european-stocks-step-higher-with-bank-gains-providing-a-lift-2017-09-21), boosted by bank stocks after hints from the U.S. Federal Reserve that more rate hikes are coming this year and next.

Regional stocks came off session lows earlier in the session after IHS Markit said business-activity data for the eurozone were overall upbeat, largely beating analyst forecasts. The composite purchasing-managers index for the currency bloc rose to 56.7 in September, marking a four-month high. (http://www.marketwatch.com/story/eurozone-pmi-point-to-stronger-3q-growth-2017-09-22)

France's composite PMI jumped to a 76-month high, while Germany's PMI rose to a 77-month high.

"Today's PMIs support the central bank's upward revisions to its staff projections for GDP growth in the near term," said Morgan Stanley economists Daniele Antonucci and Joao Almeida in a note Friday. The European Central Bank is on course to announce a monthly reduction in its bond-buying activity, they added.

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"While we see the key decision to be announced on October 26, it's quite possible that the complexity of the QE programme is such that not all details will be revealed at that meeting, with some of the technical aspects deferred to December," the economists said.

The euro climbed to an intraday high of $1.2005 after the PMI releases, up from $1.1941 on Thursday.

European stocks had opened lower Friday as trading got under way with news that North Korea's Foreign Minister Ri Yong Ho said Pyongyang might conduct a hydrogen bomb test of "unprecedented scale" in the Pacific Ocean.

Ri's comments at a United Nations meeting in New York came shortly after Kim Jong Un released a statement threatening to make U.S. President Donald Trump "pay dearly" for his fiery speech to the U.N. on Tuesday. In that speech, Trump threatened to "totally destroy" North Korea.

Read: Kim Jong Un calls Trump 'mentally deranged U.S. dotard,' setting off scramble for dictionaries (http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)

(http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)"It did not take long for North Korea to react to President Trump's recent address to the United Nations General Assembly," analysts at FxPro said in a note.

"Needless to say, these comments have caused a degree of risk off in the markets with safe-havens benefiting," they added.

Gold prices remained modestly higher Friday, rising 0.2%, while the yen climbed against the dollar.

(http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)Indexes: Germany's DAX 30 index closed less than 0.1% lower at 12,592.35, ahead of the country's general election on Sunday.

Sitting Chancellor Angela Merkel is widely expected to secure a fourth term in power, but the question is who she teams up with for a coalition.

Read:5 things you need to know about the German election (http://www.marketwatch.com/story/5-things-you-need-to-know-about-the-german-election-2017-09-21)

(http://www.marketwatch.com/story/5-things-you-need-to-know-about-the-german-election-2017-09-21)Also read:Don't call the German election boring -- it could be a huge shift for the eurozone (http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)

The U.K.'s FTSE 100 index rose 0.6% to close at 7,310.64, extending gains as the pound fell as U.K. Prime Minister Theresa May, in Florence, spoke about the U.K.'s exit from the European Union. Pound strength tends to hurt shares of multinational companies on the London benchmark.

"The fact that the pound is lower after the speech suggests that May failed to delver everything that was expected, including the rumoured divorce bill that the U.K. is willing to pay, although many believe it to be EUR20 billion," said City Index research director Kathleen Brooks in a note. "Thus, the EU's response to May's speech is likely to be even more important for U.K. asset prices."

France's CAC 40 index finished 0.3% higher at 5,281.29, lifted by L'Oréal and Carrefour.

Stock movers: Shares of L'Oréal SA (OR.FR) leapt 2.5% after the death of L'Oréal heiress Liliane Bettencourt (http://www.marketwatch.com/story/loreal-heiress-liliane-bettencourt-dies-aged-94-2017-09-21) sparked takeover speculation.

Staying in France, shares of Carrefour SA (CA.FR) rose 0.2% after the supermarkets chain said it has formed a new group executive committee aimed at improving management and coordination between departments.

On a downbeat note, shares of Smiths Group PLC (SMIN.LN) fell nearly 6% after reporting earnings (http://www.marketwatch.com/story/smiths-group-pretax-profit-soars-on-wider-margins-2017-09-22).

(END) Dow Jones Newswires

September 22, 2017 13:04 ET (17:04 GMT)