Europe open: Shares make positive start on China, German data

European shares defied downbeat pre-trade futures and weak US economic data to open higher on Thursday, as German industrial production recorded a better-than-expected jump in February and positive data from China boosted sentiment.

The pan-regional Stoxx 600 index was up 0.25% at 0715 GMT, with all major bourses higher. Investors were mulling fresh data that showed a slowdown in US service sector growth and private sector hiring, which may have increased the chances of the Federal Reserve pausing its policy of tightening.

In Asia, activity in China’s services sector grew at the fastest pace in two and a half years in March, according to data released on Thursday.

The Caixin services purchasing managers’ index rose to 57.8 from 55.0 in February, coming in ahead of expectations for it to be unchanged. This marked the third increase in a row and the fastest rate of expansion since November 2020.

Increased activity levels were linked to sustained improvements in operating conditions and new order intakes following the recent easing of Covid measures. Caixin said new export business expanded at the quickest rate on record.

German industrial production reported a sharper than expected rise of 2% in February against the previous month, driven by vehicle manufacture, the federal statistical office said.

Analysts had forecast a slight increase of 0.1%. The statistics office also revised January’s figure to a 3.7% increase, up from 3.5%. Year-on-year, industrial production rose 0.6% in February.

In equity news, shares in Temenos gained 6% after a Bloomberg report citing unnamed sources that the Swiss banking software maker had asked for fresh expressions of interest from potential suitors in recent weeks after takeover talks fell apart last year over price.

THG shares gained on a a 10-year deal with ecommerce beauty products retailer Maximo.

Reporting by Frank Prenesti for Sharecast.com