European stocks rose on Thursday, extending their sharp two-week rebound, boosted by better-than-expected German private sector growth figures which reassured investors about the outlook for Europe’s biggest economy following a soft patch.
At 1115 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,352.52 points, reaching a level not seen since late July.
Markit’s flash composite Purchasing Managers’ Index (PMI) for Germany — which tracks growth in the manufacturing and service sectors that make up more than two-thirds of the economy — came at 54.9 for August, down from 55.7 in July but still well above the 50 mark that separates growth from contraction.
Last week, GDP data showed Germany’s economy suffered a surprise contraction — its first in more than a year — in the second quarter.
“It’s a relief rally. There were concerns that the German economy was going to suffer because of Ukraine-related issues, but today’s data shows that the economy is going to keep on growing,” Koen De Leus, senior economist at KBC, said.
The FTSEurofirst 300 had lost as much as 7 percent between late June and early August, hurt by worries the Ukrainian conflict and tensions between the West and Moscow could derail Europe’s fragile economic recovery and hit corporate results.