European stocks moved higher on Wednesday as falling oil prices improved market sentiment and investors turned their attention to fresh economic data.
The pan-European STOXX 600 rose 0.4% to 645.04 points by 0708 GMT, with most major European markets also trading in positive territory.
Lower oil prices were the main support for sentiment. Expectations of increased crude supplies from the Gulf grew after Saudi Arabia restarted operations on a key pipeline, putting further pressure on oil prices.
The move has important implications for European markets because energy costs remain closely linked to inflation, corporate expenses and consumer spending. A sustained decline in oil prices could reduce some cost pressures across the economy, while also changing expectations around future interest-rate decisions.
Energy stocks still gained 0.8% despite weaker crude prices, showing that the sector’s performance was not moving directly in line with the underlying commodity during the early session.
The next major focus was euro zone purchasing managers’ index data for September. The preliminary figures were due to provide an early indication of whether business activity is strengthening or weakening across the region.
The data covers both manufacturing and services and is closely watched because it can influence expectations for economic growth and monetary policy. Stronger activity could support the view that the European economy is holding up, while weaker figures could increase concerns about slowing growth.
Aerospace and defence stocks were among the strongest performers. Saab and Exosens were among the companies gaining during the session, helping the sector outperform the wider market.
Billington Holdings plc (LON:BILN) is a UK based Group of companies focused on its structural steel and engineering activities throughout the UK and European markets.
