German manufacturing nudged upwards again in July, but France's shrank - while China adds to external worries as Western firms face what one describe as economic 'drought' there. David Pollard reports.
A classic bulls versus bears dilemma - European stocks first down then up after opening. Ambivalent, it seems about the return of Greece's share market. And showing little positive reaction to new euro zone manufacturing numbers. Germany nudged upwards in July. But Spain expanded at the slowest pace since October. And French manufacturing was confirmed as shrinking. The euro zone as a whole was comfortably above the 50 level that denotes growth. But Greece could be obscuring the benefits of the ECB's flagship quantitative easing policy. Says IG's Alastair McCaig. (SOUNDBITE) (English) ALASTAIR McCAIG, MARKET ANALYST, IG GROUP, SAYING: ''Multiple billions of euros that have been pumped indirectly into equity markets have not really had the first critical step in the recovery process, which is of course confidence, and to a certain extent a lot of that firepower has rather been wasted.'' Europe has its problems of course - but not all of its own making. Philips and ABB are among Western corporates who say they're taking a hard look at China. And what it means in terms of cutting investment, costs and product lines. ABB boss Ulrich Spiesshofer described the slowdown there as a ''drought''. While China's own manufacturing PMI sank even further in July. (SOUNDBITE) (English) ALASTAIR McCAIG, MARKET ANALYST, IG GROUP, SAYING: ''It just adds to the picture of an economy that is slowing, a growth rate that is diminishing. We've seen this replicated on the FTSE, with our overexposure to the mining sector, and it's continue to weigh on us.'' In the UK, the Bank of England prepares for its latest meeting on Thursday. UK manufacturing edged up in July - but the pace of new orders slowed on a strengthening British pound. A dilemma there too for the bank's policy-makers as they ponder the possibility of a long-awaited hike.