France CAC 40 index slipped on Monday after better-than-expected French Services Purchasing Managers Index (PMI) for June. Germany DAX index was also in the red after weak Composite and Services PMI for June. UK’s FTSE 100 index increased after the release of UK’s strong PMI while Euro STOXX 50 index edged lower.
French PMI Data
With the lifting of Covid-19 restrictions in June, French Service sector firms shot up in business activity. The rise in output was the sharpest since the beginning of 2018 amid improvement in the demand for French services.
French Services Purchasing Managers Index for June came in at 57.8 surpassing the 57.4 estimate forecast and the previous 56.6 in May.
Jobs growth increased gradually and was boosted by increase in outstanding work volumes. French business confidence remained positive while vendor fees inched higher. This exerted upward pressure on input costs. It also drove services firms to increase their charges.
According to surveys, the easing of lockdown restrictions was among the main contributors to the expansion. Consumer facing services were also a boost to the expansion while hotels and restaurants continued to drag on overall activity levels.
Cost inflation hit a 17-month high in June and was linked to greater supplies fees and input shortages. Strong demand and rising expenses drove firms to increase their selling charges in June.
The French Markit Composite PMI for June closed in higher at 57.4 from the previous 57.0 in May. It signaled a strong expansion in business activity across the French private sector in the same month.
Both the manufacturing and service sectors have been on an upward trend since April. Total intakes for new businesses continued to increase in June. Activity growth was hovering at a 41-month high in June.
CAC 40 Movers
Among the best performers in the CAC 40 index include ArcelorMittal, Société Générale, and STMicroelectronics. ArcelorMittal gained 1.94% in its stock earnings. The global steel giant is still lingering in the running for Liberty Steel’s key French activities.
Société Générale was up by more than 0.86%. A few weeks earlier, the bank announced its plans to expand into sustainable finance in India. STMicroelectronics gained more than 1.02% in its stock prices.
Among the drags in the index include Bouygues, Atos, and Vinci. Each lost more than 0.90% in its stock earnings.