Europe midday: Shares rally despite weak eurozone PMI, Stellantis woes
By Frank Prenesti
Date: Monday 02 Dec 2024
(Sharecast News) - European stocks rallied to post healthy gains on Monday after a weak open, with Stellantis shares down sharply after the shock resignation of the car maker's chief executive over the weekend.
The pan-regional Stoxx 600 index was up 0.43% with most major bourses rebounding.
French shares were down 0.91% and the euro weakened against the dollar as the chances that Prime Minister Michel Barnier's government could be ousted by a no-confidence vote threatened by far-right parties increased as negotiations over his austerity budget reportedly reached an impasse over the weekend.
Traders were also digesting data showing he manufacturing downturn across the eurozone worsened in November, according to a survey by S&P Global and Hamburg Commercial Bank, with the rate of contraction accelerating in the region's three largest economies.
The manufacturing purchasing managers' index (PMI) declined to 45.2 last month, down from 46.0 in October and in line with the flash reading released two weeks ago.
Declines in new factory orders, production, purchasing activity and inventories all worsened, with the sub-indices for all four measures falling further from the neutral 50-point level.
New orders, in particular, have been on the decline for just over two and a half years, with the rate of decline picking up pace in November as sales performances in export markets weakened.
Meanwhile, in China the manufacturing sector grew at its fastest rate in five months in November, according to data from Caixin and S&P Global.
The manufacturing PMI rose to 51.5, up from 50.3 in October and ahead of the 50.5 consensus forecast,
This was the second straight month of expansion and the strong expansion since June, helped by higher new work inflows, which rose at their fastest rate since February 2023.
Auto sector stocks were all lower after news that Carlos Tavares announced his resignation, blaming "different views" between himself and the Stellantis board.
The company has been struggling with declining sales and high inventories in the US. Shares in the automaker were down 8%. Volvo, Valeo, Renault and Forvia also fell on the news.
Shares in Delivery Hero's slumped after the company was forced to give workers at its Spanish subsidiary Glovo full employment status. The company had already faced fines of more than €135m for historical labour violations.
Elsewhere, shares in UK housebuilders Persimmon and Vistry fell on a broker downgrade.
Reporting by Frank Prenesti for Sharecast.com
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