Euro-zone business activity expansion exceeds expectations

European stocks ended mostly unchanged on Monday with better than expected euro-zone data supporting markets led by bank shares while pharmaceutical companies sold off. Strong manufacturing and services readings for euro-zone from Markit limited euro‘s slide against the dollar on the background of rising expectations of a Fed rate hike soon, while the British Pound extended losses against the dollar on continued hard Brexit concerns.

The Stoxx Europe 600 closed flat at 344.26. Monte dei Paschi shares rallied 28% as the Italian bank was set to unveil a capital-boosting and new business plan on Monday. Bank stocks rose as JP Morgan recommended investors buy financial stocks on prospects of rising global yields. Germany’s DAX 30 index rose 0.5% to record high this year at 10761.17 with both services and manufacturing PMIs exceeding expectations. France’s CAC 40 gained 0.4% while UK’s FTSE 100 lost 0.5% to 6986.40. Today October Ifo Business Climate, Current Assessment and Expectations Indexes all came in much higher than expected in Germany, indicating improved euro-zone business prospects as perceived by company executives. At 16:30 CET ECB President Draghi speaks in Berlin, and at 16:35 Bank of England Head Carney speaks at House of Lords Economic Committee.