Global Stocks Lifted by Robust Economic Data -- 5th Update
European stocks rose Thursday as economic data out of China, the U.S. and the eurozone beat expectations.
The Stoxx Europe 600 was up 0.8% with British, German and French stocks all rising by similar amounts.
U.S. equity futures rose too, with the S&P 500 and the Dow Jones Industrial Average each up 0.3% ahead of the open in New York.
Eurozone inflation data released Thursday was above forecasts, with consumer prices rising 1.5% in August. Core inflation, a measure that strips out volatile items such as food and fuel, held steady at 1.2%.
But analysts are split as to whether eurozone inflation has the potential to continue rising.
"We expect the uptrend in core inflation to continue in coming months, even without wage growth improvements, as GDP growth should remain above trend," said analysts at Citigroup after the release.
Others disagreed. "We do not expect a further rise in the core inflation rate," said Commerzbank analyst Christoph Weil. "On the contrary, should recent euro appreciation prove lasting, the core rate could even drop below 1% again."
Core inflation is still below the European Central Bank's target of just under 2%. The eurozone unemployment rate held steady at 9.1% in July.
"Everyone's used to writing gloomy stories about Europe, but you're starting to get a nicely aligned, coordinated economic upswing," said Stewart Robertson, senior economist at Aviva Investors.
"There's been a great deal more political harmony than anyone had really expected at the start of the year," he said. "But inflation is still struggling to come back."
A major Chinese business survey helped to spur a 1.6% rise in the Stoxx 600's basic resources sector, with the August manufacturing purchasing manager's index above expectations at 51.7. Any figure above 50 indicates that the industry surveyed is growing is growing.
In Asia, the Nikkei Stock Average closed up 0.7%, after weakening in 14 of the past 19 trading sessions, leaving the index down for August.
Many other markets in the region are poised to emerge from a volatile summer largely unscathed, with double-digit gains for the year.
In China, the Shenzhen A Share index closed up 0.3%, while Hong Kong's Hang Seng ended the day down 0.4%
"The summer break sees investors returning to markets not looking much different from when they left," wrote Mark Tinker, head of AXA IM Framlington Equities Asia. Markets witnessed bouts of selling in August over tensions between North Korea and the U.S., though shares mostly recovered within a short span.
On Thursday, gains for the U.S. dollar drove Japanese equities as the greenback recouped some losses made earlier in the week, after the U.S. reported its fastest pace of economic growth in more than two years. The economy in the second quarter grew 3% compared with the same period a year ago, beating market expectations.
In foreign-exchange markets, the WSJ Dollar Index ticked slightly higher, up 0.3% after rising 0.43% Wednesday. Against the yen, the greenback rose 0.3%, back above 110. The euro dipped slightly against the dollar, falling by 0.3% to $1.185.
The euro's recent strength led to an end-2017 forecast upgrade from Bank of America Merrill Lynch this week, from $1.08 to $1.15. Some analysts see the common currency rising even further than its current levels.
"We see the risks as still skewed toward the euro overshooting above 1.20 at some point this year rather than permanently reversing lower," said Deutsche Bank strategist George Saravelos in a note to clients published Thursday.
Write to Mike Bird at Mike.Bird@wsj.com and Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
August 31, 2017 07:50 ET (11:50 GMT)