European stocks gain on hopes for economy

STORY: European stocks gained for a third day on Wednesday (January 4) morning, lifted by glimmers of hope for the economy.

Germany’s DAX index was up around 1.2% in early trades, with France’s CAC 40 up a little more.

Data out that morning showed euro zone business activity contracted less than expected at the end of the year.

S&P Global’s closely watched composite Purchasing Managers’ Index for the euro zone hit 49.3 in December.

That’s still below the 50 point mark that would signify growth, but it’s well up on earlier estimates and last month’s figure.

Economists say that means any recession could be milder than previously feared.

Inflation numbers offered some cheer too, with France seeing price rises cool off in December.

The headline rate fell to 6.7%, down on last month and below forecasts.

Slowing energy price rises were among the factors.

Numbers in the UK were less encouraging, however.

New figures there showed fresh food prices jumping 15% on the year in December - the biggest rise since records began in 2005.

London’s FTSE index was up just over 0.5% in early trades.