By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets bounced back on
Wednesday, helped by a round of upbeat earnings results.
The positive trading day came after a rough trading day on
Tuesday, when a trifecta of slumping oil prices, a cut to eurozone
growth forecasts and a Reuters report suggesting a divided ECB
governing council sent markets sharply lower.
Wednesday's market reaction: The Stoxx Europe 600 index gained
0.7% to 333.20, after sliding 1% on Tuesday.
France's CAC 40 index picked up 0.8% to 4,161.41, while
Germany's DAX 30 index climbed 0.9% to 9,249.73. The U.K.'s FTSE
100 index rose 0.6% to 6,494.15. Read: M&S leads FTSE to first
gain in three days
The pound (GBPUSD) dropped to $1.5898, from around $1.6003 late
Tuesday, after a disappointing reading on activity in the U.K.
services sector.
Earnings boost: Among companies rising after reporting earnings,
Marks and Spencer jumped 8.4% after the retailer delivered a
surprise rise in underlying profits for the first half of the
year.
Hannover Re SE picked up 1.4% after the reinsurer posted
third-quarter profit ahead of expectations.
Lundin Petroleum AB added 2.8% after reporting a rise in profit
for the third quarter.
Data: The Markit/CIPS services purchasing managers index for the
U.K. slumped to a 17-month low of 56.2 in October, missing
consensus forecasts of a 58.5 print. The PMI stood at 58.7 in
September.
The reading on the services sector comes after data earlier this
week showed the PMI for U.K. construction declined, while the
manufacturing data improved.
"October's PMI surveys point to a sharp slowing in U.K. economic
growth at the start of the fourth quarter, with the pace of
expansion down to its lowest for almost one-and-a-half years," said
Chris Williamson, chief economist at Markit, in a note.
The composite eurozone PMI for October, also out on Wednesday,
indicated economic growth stabilized in the beginning of the fourth
quarter, with the index up slightly to 52.1 from 52 in
September.The flash reading was 52.2.
Ruble: The Russian currency (USDRUB) hit a fresh record low
against the dollar after the Bank of Russia moved one step closer
to letting the ruble float freely. The dollar bought 44.48 rubles
in midmorning trade.
Iceland rate cut: Iceland's central bank cut its main interest
rate by 25 basis points to 5.75%, in an effort to boost inflation,
which is expected to slip further below its target in the coming
months. It was the first rate cut in Iceland in two years.
Also read: Follow U.S. market action here
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