(Bloomberg) -- European stocks edged higher, driven by a rally in defensive shares, as investors weighed signs of weaker regional growth against expectations of a resilient global economy.
The Stoxx Europe 600 Index gained 0.3% by 9:30 a.m. in London. Food, beverage and tobacco stocks as well as utilities, telecoms and real estate outperformed — all sectors that are considered defensive at a time of economic uncertainty.
The euro area’s private-sector economy shrank for the first time since March, according to data released Monday, with a deepening manufacturing downturn heightening concerns that the region’s recovery has run out of steam.
Meanwhile, Commerzbank AG fell as Germany said it won’t sell any more shares in the lender, a move that demonstrates the depth of opposition in Berlin to any takeover by Italian rival UniCredit SpA.
Europe’s benchmark index has declined this month — and is about 2% below its August record high — on worries about a US recession as well as seasonal headwinds. Investors are looking for the next catalysts following the Federal Reserve’s interest-rate cut last week.
China on Monday announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fueling speculation officials are preparing to ramp up efforts to revive growth.
China’s rate reduction “will provide a little uplift in sentiment but the really important news is going to be the press conference and economic briefing tomorrow,” said Joachim Klement, a strategist at Panmure Liberum. “Markets are clearly hoping for significant stimulus measures and any more dithering would be bearish.”
France’s CAC 40 fell as investors weighed continued political uncertainty. President Emmanuel Macron’s new government sparked an immediate angry reaction from across the political spectrum, raising the risk of a swift collapse that would further cloud the outlook for the country’s stretched public finances.
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--With assistance from Michael Msika.
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