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Market Update

European Manufacturing Growth Slows down; Barclays, Glencore in Focus

Author: Lucy Stoeva
Last Update: 1:16 PM ET March 01 2016

4:00 PM Frankfurt, Germany - European market indexes rose on Tuesday on merger talks. Manufacturing sector growth declined in China and in the euro zone. The LSE, in merger talks with Deutsche Börse, is now acquisition target of ICE and other exchanges. Glencore profits fell 32%. Barclays cut dividend.

European market indexes rose on Tuesday on merger talks, and the weaker euro lifted industrial stocks.

The euro fell 0.25% to 1.0856 against the dollar, hitting a 30-day low, and boosting the manufacturing sector heavily reliant on exports like vehicle makers.

Shares of Fiat Chrysler surged 5.3%, BMW gained 4.2% and Peugeot climbed 4.3%, also fueled by the widening interest in the Geneva car show.

London Stock Exchange soared 7.5% after Intercontinental Exchange said it was considering making an offer for the U.K. stock market operator.

Last week, the LSE said it was discussing with Deutsche Börse a possible merger worth $28 billion.

Reportedly, the Chicago Mercantile Exchange is also considering a takeover bid for the LSE.

In China, the official manufacturing PMI index fell to 49.0, its lowest level in four years, and down from 49.4 in January.

The non-manufacturing PMI declined to 52.7 from 53.5 in January. A reading above 50 indicates industry expansion and below 50 signals contraction.

In the euro zone, February PMI hit a 12-month low at 51.2, down from 52.3 points in January, according to Markit final data.

Nevertheless, the PMI recorded its 32nd consecutive month of expansion but in the recent months the growth has been slowing.

The decline in manufacturing growth data raised expectations that both authorities in Beijing and the Brussels would announce further stimulus measures.

In London, FTSE 100 index advanced 55.79, or 0.92%, to 6,152.88, while in Frankfurt, the DAX index surged 221.76, or 2.34%, to 9,717.16.

In Paris, the CAC 40 index rose added 53.29, or 1.22%, to 4,406.84.

Ashtead Group Plc lost 8.8% to 542.5 pence after the equipment-rental company announced plans to cut capital expenditure.

Pre-tax profit in the quarter ended Jan.31 rose 16% to 133.5 million from the same period a year ago.

Revenue increased to 612.2 million, compared with 512.9 million in the previous year.

However, the company plans to limit capital spending to less than £1 billion next year on the growth worries in its U.S. division, where Ashtead makes most of its sales.

Barclays Plc tumbled 8.2% to 157 pence after the bank reported a drop in 2015 pre-tax profit and a dividend cut amid restructuring efforts.

Adjusted pre-tax profit fell to £5.4 billion for the year to Dec. 31 from £5.5 billion a year earlier.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc