European stocks inched higher on Friday even as the latest data showed Europe’s economic recovery slowed in August.
The euro area private sector grew at a slower pace in August following a rebound from the downturn caused by the coronavirus pandemic, flash survey data from IHS Markit showed.
The composite output index fell unexpectedly to 51.6 in August, while the score was expected to remain unchanged at 54.9.
The recovery was undermined by signs of rising virus cases in various parts of the euro area, with renewed restrictions impacting the service sector in particular.
The softer overall expansion owed exclusively to weakness in the service sector as growth of manufacturing production quickened.
Elsewhere, activity in the U.K.’s private sector grew at its sharpest pace since 2013 in August, alleviating some concerns over an extended economic slowdown.
The composite purchasing managers’ index (PMI) reading from IHS Markit’s closely watched survey came in at 60.3, beating forecasts and above July’s figure of 57.
U.K. retail sales grew 3.6 percent month-on-month in July, driven by non-food store turnover, official data showed. That was slower than the sharp 13.9 percent rise in June and 12.2 percent increase in May, but beat forecasts for a 2 percent gain.
The pan-European Stoxx Europe 600 index rose 0.4 percent to 367.17 after falling 1.1 percent on Thursday. The German DAX gained 0.4 percent, France’s CAC 40 index added 0.3 percent and the U.K.’s FTSE 100 was up 0.1 percent.
The British pound hit a 1-1/2-month high against the euro and inched towards an eight-month high against the greenback after the release of encouraging data.
Irish building and insulation materials firm Kingspan soared 8 percent after its chief executive said the company saw significant pent up demand post-lockdown.
Novartis advanced 1.5 percent as the U.S. health regulator approved the company’s relapsing-multiple-sclerosis drug Kesimpta (ofatumumab) after two Phase 3 studies.
Flughafen Zuerich AG rallied 2 percent. The owner and operator of Zurich airport reported better-than-expected revenue and earnings for the first half of the year.
HG Capital surged 4 percent in London on news it will invest in Visma alongside other institutional clients.
Travel and leisure stocks were moving higher, with Lufthansa, TUI AG and easyJet rising 1-2 percent.
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