European markets opened higher Thursday and continued to rally after the Purchasing Managers’ Index (PMI) data for the 19-nation eurozone revealed a surge in private sector growth in August. Most Asian markets closed higher.
The pan-European Stoxx 600 was trading up 1.4 percent, while London’s benchmark FTSE 100 index moved up 1.48 percent. Germany’s Dax was up 1.65 percent and France’s CAC 40 was trading up 1.28 percent.
The eurozone’s final composite PMI for August, released Thursday, stood at 54.3 -- its highest since May 2011 -- led by a surge in economic activity in Spain, which saw its second-strongest expansion in over eight years. A PMI figure above 50 denotes expansion.
The latest figures come ahead of an expected policy decision announcement by the European Central Bank (ECB). Reports suggest that the ECB might extend its 1.1 trillion-euro ($1.2 trillion) stimulus program, which has been in place for the last six months, in an attempt to boost the bloc’s modest recovery. The program, which entails the ECB and national central banks of the 19 eurozone nations buying 60 billion euros ($67 billion) of government and corporate bonds every month, is currently scheduled to stay in place until September 2016.
“The ECB will be reassured by the ability of the eurozone economy as a whole to withstand recent headwinds,” Chris Williamson, chief economist at data firm Markit, said, in a statement. “Policymakers have little scope for complacency, however, as slower growth in the emerging markets and recent financial market volatility as well as a stronger euro have the potential to hit the economy’s performance in coming months.”
Earlier Thursday, most Asian markets also recovered, spurred by the previous day’s rally on Wall Street.
Japan’s Nikkei 225 index closed higher for the first time in four days -- gaining 87 points during the day’s trade. South Korea’s Kospi also reported modest gains, and India’s benchmark Sensex index closed up 1.22 percent. However, in Australia, the S&P ASX 200 index ended down 1.4 percent at 5,027.80 points.
“A major source of market disruption is sidelined as markets in China are now closed for the week,” Michael McCarthy, chief market strategist at CMC Markets, Sydney, told Bloomberg. China’s bourses are closed Thursday and Friday as the country commemorates the 70th anniversary of the end of World War II.