U.S. Markets

Short-covering helps European shares shrug off PMI data

MILAN/LONDON (Reuters) - European shares rose to fresh eight-month highs on Thursday as short covering kicked in and a weaker euro helped investors shrug off disappointing euro zone business activity surveys.

“There is so much pessimism around Europe that the negative PMI data failed to find fresh sellers, triggering short-covering,” said Giuseppe Sersale, fund manager at Anthilia Capital in Milan.

A survey of fund managers by Bank of America Merrill Lynch (BAML) found this week that short positioning on European equities was the “most crowded trade” for the second straight month in April.

The euro-zone index hit its highest level since end-August and was up 0.3 percent by 1015 GMT, while the broader pan-European STOXX 600 index hit its highest since Aug. 7.

Businesses across the euro zone stumbled into the second quarter as demand remained weak despite more modest price rises, surveys showed on Thursday.

Reporting by Danilo Masoni, Thyagaraju Adinarayan and Josephine Mason; editing by Josephine Mason