European markets and region-related exchange traded funds strengthened Thursday on the improving economic outlook.
On Thursday, the Vanguard FTSE Europe ETF (NYSEArca: VGK) rose 1.1%, iShares MSCI EMU ETF (NYSEArca: EZU) gained 1.8% and SPDR EURO STOXX 50 (NYSEArca: FEZ) advanced 1.9%. Over the past year, VGK increased 27.9%, FEZ jumped 25.6% and EZU surged 28.9%.
Adding to European market momentum, the region’s services PMI data revealed the Euro area was near its best growth in seven years while services growth in Italy and Spain beat expectations, Reuters reports.
The iShares MSCI Italy Capped ETF (NYSEArca: EWI) was also among the best performers Thursday, jumping 2.9%.
“The continued strength and breadth of the business surveys is encouraging,” Mike Bell, global market strategist at JP Morgan Asset Management, told Reuters, 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.”
The economic growth in the Eurozone hitting its highest level in almost seven years was attributed to near-record expansion of manufacturing production and the steepest increase in service sector activity in over six-and-a-half years, according to MET Newswires.
IHS Markit revealed that its purchasing manager index spiked to 58.1 in December from the previous month’s 57.5, according to the Associated press. The Eurozone economy has withstood headwinds, largely heightened political risks in an election packed year, and managed to push through solid growth for 2017.
“A stellar end to 2017 for the eurozone rounded off the best year for over a decade, continuing to confound widely-held fears that rising political uncertainty would curb economic growth,” Chris Williamson, IHS Markit’s chief business economist, told the Associated Press.
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