Europe close: Markets advance amid mixed bag of economic data

European stocks edged higher on Tuesday as investors mulled over a series of data releases amid expectations that central banks will continue with their easing monetary policies.

The benchmark Stoxx Europe 600 index closed up 0.59%, while France’s CAC rose 0.95% and Germany’s DAX climbed 0.90%.

The euro was on the front foot against the main currencies, surging 0.66% against the US dollar and 0.46% and 0.14% respectively against the yen and the euro.

IG’s senior market analyst Chris Beauchamp said the strong performance in equity markets was due to a combination of factors, “including optimism about US rates and expectations that Mario Draghi will deliver the goods.”

“Given that the environment remains little changed since the last Fed meeting, and while US central bankers continue to talk about rate hikes, it seems unlikely that anyone will do anything so rash as to actually vote for one,” he said.

“The second is more difficult to forecast, since the ECB is as yet unwilling to expand a QE programme that has not fully proved its worth.”

Mixed data in the Eurozone

On the economic data front, figures released by Destatis showed German industrial orders were down 1.8% on the month, compared with expectations for a 0.5% increase, while July’s drop was revised down to 2.2% from 1.4%.

Meawhile, Germany’s construction sector expanded at the fastest rate in six months in September. Markit’s construction purchasing managers’ index rose from 50.3 in August to 52.4, marking the strongest increase in construction output since March.

Growth in the German retail sector slowed slightly in September but the overall quarterly performance was the best since 2006.

Elsewhere, data revealed retail sales in the Eurozone grew for the fifth consecutive month in September.

Markit’s retail PMI showed the rate of growth in the retail sector picked up slightly in September, as it rose from 51.4 in August to 51.9.

In company news, Volkswagen shares rallied 4.09% after the company’s chief executive said it will delay or cancel all non-essential projects in a bid to slash spending following the emissions scandal.

French mobile operator Bouygues Telecom rose 3.87% after the company said it aims to improve its profit margins and sales in the coming years as it looks to defend its standalone strategy.

French media group Vivendi gained 1.62% after raising its stake in Telecom Italia to 19.9%.