Europe close: Stocks hit four-month high on improving data, rate-cut hopes

(Sharecast News) - European stock markets have kicked off December with a bang, rising over 1% on the back of improving economic data and rising hopes that a European Central Bank (ECB) rate cut could be on the cards. The Stoxx 600 index finished the session 0.99% higher at 466.2, a level it has not seen since 1 August, following a 7% jump over the month of November. London's FTSE 100 and Frankfurt's Dax both gained over 1%, while markets in Paris, Milan and Madrid put in smaller gains.

Stocks were extending gains made on Thursday after data revealed that inflation had slowed more than expected in both the US and eurozone, raising hopes that policymakers will move to cut interest rates sooner than initially predicted. The data strengthened bonds, with the yield on a 10-year German Bund down 8.8 basis points on Friday at 2.36%, its lowest since late-June, and the yield on a 10-year US Treasury down 7.4 basis points at 4.259%, its lowest since early September.

Analyst David Morrison from Trade Nation, said: "Despite efforts from central bankers to play down dovish expectations, investors have convinced themselves that next year will bring a flurry of rate cuts, and not just from the US Federal Reserve, but the ECB and even the Bank of England too."

Also helping sentiment on Friday were manufacturing purchasing managers' indices (PMIs) from China, UK and the eurozone, which all beat expectations.

The Caixin/S&P Global China manufacturing PMI rose to a three-month high of 50.7 in November from 49.5 in October, beating the 49.8 consensus estimate. The final reading of the S&P Global/CIPS UK manufacturing PMI was revised to 47.2, the highest level since April. This was up from 44.8 in October and ahead of the consensus and flash estimate of 46.7. Meanwhile, the S&P Global/HCOB eurozone manufacturing PMI was revised up to 44.2 last month from an initial estimate of 43.8. This was a six-month high and up from 43.1 in October.

The ISM US manufacturing PMI, however, was unchanged in November at 46.7, with economic activity in the sector contracting for the 13th month straight.

Viaplay tanks

Swedish streaming company Viaplay saw shares drop 74% in Stockholm after announcing plans to raise SEK4bn (£300m) and restructure its debt totalling SEK14.6bn, saying it had to lay off more than 30% of staff. "This extensive package and operational measures are absolutely necessary to secure the survival of the company," said chair Simon Duffy.

Worldline, the payment services firm, was rallying 6% on reports that lender Credit Agricole could build a stake in the French company.

Mining stocks were performing well in London, with Anglo American, Rio Tinto and Antofagasta among the top risers on the Stoxx 600 after improving economic data from China lifted the demand outlook. Anglo and Antofagasta were also helped by rising copper prices and a broker upgrade by UBS.

Also in London, Ceres Power tanked 7% after warning on full-year revenues, as it conceded it was unlikely to sign new deals in time for the revenue to be recognised in 2023.