European stocks close higher as the region’s business booms


European stocks closed higher for the third consecutive year on Monday as business in the region expanded at the fastest pace in more than a decade.

On a day of lower trading volume due to a U.S. holiday, Independence Day, which closed Wall Street, the statewide Stoxx Europe 600 index rose 0.3 percent.

Strong readings in the purchasing managers’ indices for services in Spain and Italy raised the total for the euro area’s services sector to 58.3 in June, the highest level since July 2007.

In the case of Italy, “the improvement came with easing Covid restrictions,” said Mel Debono, senior European economist at Pantheon Macroeconomic. “Most of the country’s regions moved to the least restrictive white zones in the middle of the month.”

Madrid’s Ibex 35 index rose 0.4 percent while Milan’s FTSE MIB closed the session 0.6 percent.

The London FTSE 100 Index, which is heavily weighted by energy companies, closed with a further rise in oil prices of 0.6 percent.

The global Brent crude oil marker rose more than 1 percent to $ 77.26 a barrel, its highest level since October 2018, when OPEC and its allies abandoned a decision to increase their oil production.

West Texas Intermediate, the US benchmark, rose more than 1.5 percent to $ 76.35 a barrel and was nearing a three-year high.

Markets in Asia were shaken after Beijing expanded its crackdown on technology platforms to include Boss Zhipin, an online recruiting company, and the Chinese truck-hailing apps Yunmanman and Huochebang.

Movements rippled through the markets in the region, causing the Hang Seng Tech index to drop 2.3 percent and lagging the broader Hang Seng benchmark, which was down 0.6 percent.

In the US, analysts digested Friday’s payrolls that showed the job market had created 850,000 jobs in June, well above economists’ expectations and higher than the revised May of 583,000.

Investors will watch out for economic signals from the US this week about the direction of the recovery, said Luca Paolini, chief strategist at Pictet Asset Management.

Further strong weekly unemployment rates could put pressure on the US Federal Reserve to wind down its policies that supported the economy during the pandemic.

“We’ll have the Federal Reserve Protocol” [Wednesday]. People will try to see if anything about that can change the Fed in unpredictable ways, ”Paolini said.

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