European markets opened higher on Tuesday after the latest data from China showed manufacturing activity in the world’s second-largest economy expanded at its fastest rate in nearly 10 years.
The pan-European Stoxx 600 index rose over 0.1 higher in early morning deals, with most sectors and major bourses in positive territory. Technology shares led the gains with a 1.2% jump.
It comes after China’s Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for the month of August came in at 53.1. PMI readings above 50 indicate expansion, while those below that signal contraction. PMI readings are sequential and indicate on-month expansion or contraction.
The reading beat expectations and prompted China’s onshore yuan to strengthen against the U.S. dollar, last trading at 6.8213.
On Monday, China’s official manufacturing PMI for August came in slightly below expectations at 51.0, according to the country’s National Bureau of Statistics.
Market participants have closely monitored economic data release from China for signs of the country’s economic recovery from the coronavirus pandemic.
To date, more than 25.4 million people have contracted the Covid-19 infection worldwide, with 850,596 related deaths, according to data compiled by Johns Hopkins University.
On Wall Street, the Dow Jones Industrial Average and the S&P 500 dipped into negative territory on Monday, while the Nasdaq closed higher. The Dow and S&P wrapped up their best August in more than 30 years despite Monday’s losses, while the tech-heavy Nasdaq registered its best monthly performance since 2000.
Back in Europe, Markit manufacturing PMI data for the euro zone will be released at 9 a.m. ET.
The euro zone’s unemployment rate for July and consumer price index for August will both follow slightly later in the session.
— CNBC’s Huileng Tan contributed to this report.