UPDATE 1-European stocks rally picks up pace as services growth impresses

From Reuters - January 4, 2018

LONDON (Reuters) - A rally in European stocks picked up pace on Thursday, following the lead of Asian shares which hit a ten-year peak overnight, as services growth data for the euro zone confirmed a strengthening economy was bolstering corporate activity.

Gains spanning cyclical sectors including industrials .SXNP and banks .SX7P drove the pan-European STOXX 600up 0.5 percent while euro zone stocks .STOXXE and blue-chips rose 0.8 percent.

Services PMI data showed the euro area was near its best growth in seven years, while services growth in Italy and Spain beat the previous flash estimates.

Banks Santander (SAN.MC), BNP Paribas (BNPP.PA) and ING (INGA.AS) were among the top boosts to the STOXX as increasing enthusiasm about the euro zones recovery helped push money into financial stocks.

The continued strength and breadth of the business surveys is encouraging, said Mike Bell, global market strategist at JP Morgan Asset Management, adding the improvement in Italian PMIs was a positive heading into the election.

We continue to believe that the outlook for European equities is positive, aided by the potential for close to ten percent earnings growth in 2018, Bell added.

The improving economic backdrop drove analysts to hold back on downward revisions for euro zone company earnings as they awaited the beginning of the fourth-quarter results season.


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