European stocks rise amid cooling sell-off in longer-dated bonds

Investing.com - European stock markets closed higher on Wednesday, recovering from declines in the prior session, as a sell-off in longer-dated regional bonds showed signs of easing.

The pan-European Stoxx 600 rose 0.7%, Germany’s Dax had added 0.4%, and the CAC 40 in France had gained 0.9%.

On Tuesday, the benchmark Stoxx 600 slumped to its largest one-day drop in over a month, weighed down by concerns over Europe’s fiscal health that pushed up bond yields, which tend to move inversely to prices. Still, yields on longer-dated French and German government debt remained around multi-year peaks.

"Globally, the long ends of yield curves remain under upward pressure amid a mix of fiscal concerns and worries about central bank independence," analysts at ING said in a note to clients.

Meanwhile, investors assessed a series of business activity data points from the Eurozone currency area. The August reading of the HCOB Eurozone Composite Purchasing Managers’ Index, which is compiled by S&P Global, rose to 51.0 from 50.9 in the prior month.

While it was a 12-month high for the gauge and came in above the 50-point mark separating expansion from contraction, the level was indicative of just slight growth, as improvements in manufacturing output were tempered by a softer-than-anticipated services sector PMI.

Germany, the traditional powerhouse of the European economy, also saw expansion cool, while France remained in contraction territory. Spain was the region’s strongest performer, yet growth still eased in the country.

In individual stocks, Adidas shares rose 4.4% after Jefferies, a brokerage, lifted its rating of the athletic apparel maker to "buy" from "hold," arguing that the company now has a greater number of potential growth sources.

Swiss Life’s stock price, meanwhile, slipped after elevated tax expenses led to a decrease in first-half net profit at the insurer.

(Reuters contributed reporting.)