European shares rise on central bank stimulus speculations

European shares soared on Tuesday trading amid speculations the slowdown in growth may prompt central banks either to hold stimulus or introduce new measures.

Eyes will focus on ECB monetary decision on Thursday, where markets predict to see a new stimulus to revive recovery and boost the low inflation.

Data released yesterday signaled a slowdown in euro area, UK and China manufacturing sector in August, raising speculations central banks will have to keep stimulus to bolster recovery.

Later in the day, a U.S. report may show the manufacturing sector expansion eased to 57.0 in August from 57.0 in July.

The nonfarm payrolls data due on Friday will grab attention as investors believe any change in the Fed’s monetary stance would depend on the progress in the labor market.

As of 06:52 EST, STOXX EUROPE 600 soared 0.30% to record 343.88 points. Materials led the advance with a rise of 0.92%, followed by Financials which recorded 0.68% rise. 

The highest shares were for Legrand SA as it advanced 4.10% to 43.815 EUR, while the biggest drop was recorded by GAM holdings AG as its shares plummeted 2.79% to 17.40 CHF.

Looking at other the major European indices, the French CAC index edged up 0.42% to 4397.93 levels and Germany`s DAX index rose 0.87% to 9561.12 points. Britain`s FTSE 100 index recorded 0.14% advance to 6834.80 points.