European indices reach eight week high on positive Chinese data

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European stocks climbed the most in eight weeks, recovering from their second weekly drop as China’s better than expected PMI data was announced at 51, suggesting that growth rates have been consolidating since July. A figure greater than 50 indicates that activity has expanded.

Mining stocks will also be in focus today after data showed factories in China, the world’s largest consumer of metals, had their best growth in months in August as domestic demand made up for weak exports. BHP Billiton and Rio Tinto Group each gained more than 1.5 per cent as a gauge of mining companies advanced. US Index futures and Asian shares also climbed.

Focussing on UK markets, Vodafone Group rose 4.3 per cent after a source confirmed Verizon Communications has reached a deal to buy the British phone operator’s 45 per cent stake in their US joint venture for $130 billion.

Top performers included Vedanta Resources and Anglo American, which climbed 3%.

In FX, the pound strengthened to the highest level versus the euro in two months as a report showed the UK house price growth quickened in August, adding to signs that the economy is recovering.

The pound appreciated 0.4 per cent to 84.94 pence per euro at 8.03 am (London time) after reaching 84.85 pence – the strongest level since July 3. The UK currency rose 0.3 per cent to $1.5558.

In indices, the FTSE is currently trading at 6412, whilst the DAX is trading at 8224. On Friday, the DOW closed at 14840.

Economic data today includes the UK manufacturing PMI, released at 9.30am. The data was forecast to come in at 55.2.

US banks are closed today in observance of the Labour Day Holiday.