London’s FTSE 100 extends gains after upbeat PMI report

 London’s FTSE 100 extended gains in quiet trade on Wednesday, after data showed that the contraction in the U.K. manufacturing sector slowed in April.

Trade volumes remained thin, with many markets in Europe closed for the Labor Day holiday.

During European afternoon trade, the FTSE 100 gained 0.7%, after Markit said that its U.K. manufacturing purchasing managers’ index rose to a seasonally adjusted 49.8 from 48.6 in March, just below the 50 level that separates growth from contraction.

Analysts had expected the index to tick down to 48.5.

Miners shrugged off weaker-than-expected manufacturing data out of China to lead gains.

Mining heavyweights BHP Billiton and Rio Tinto added 1.1% and 1.2% apiece, while Antofagasta increased 2.2%.

Official data released earlier showed that China’s manufacturing purchasing managers' index ticked down to 50.6 in April from 50.9 in March.

Market players now looked ahead to the conclusion of the Federal Reserve’s two-day policy meeting later in the day, as investors try to assess the central bank's attitude towards monetary stimulus.

Recent economic data has dampened expectations for an earlier than expected end to the central bank’s asset purchase program after recent Fed minutes showed that policymakers are divided over the benefits of ongoing monetary easing.

Data on Tuesday showed that the Chicago purchasing managers’ index dropped 49.0 in April from 52.4 in March, the lowest level since September 2009.

The dismal data came after a report last week showed that the U.S. economy grew 2.5% in the first quarter, falling short of expectations for 3.0% growth, underlining concerns over the outlook for the economic recovery.

Meanwhile, investors eyed an upcoming ECB policy meeting later in the week, amid growing expectations for an interest rate cut.

Data on Tuesday showed that euro zone unemployment rose to a record in March, while inflation fell more-than-expected in April.

Recent comments by ECB officials have indicated that the bank would consider cutting rates if economic data continued to deteriorate. 

In the U.S., equity markets pointed to a steady open, as traders awaited the outcomes of the Federal Reserve’s policy meeting later in the session.

The Dow Jones Industrial Average futures pointed to a 0.1% gain, S&P 500 futures signaled a 0.1% advance, while the Nasdaq 100 futures indicated a 0.1% rise. 

Later Wednesday, the U.S. was to release data on ADP nonfarm payrolls, while the Institute of Supply Management was to publish its report on manufacturing activity.

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