French private sector rebounds to highest level in five months

French private sector activity bounced back in January to it highest reading in five months according to the purchasing manager’s index compiled by the Markit research firm. The index of the key forward-looking survey of manufacturing and services rose 50.9 points – any score above 50 indicates growth while any score below is a contraction. 

REUTERS/Ralph Orlowski

There was also an improvement in services to 51.7 points, but industry continues to fall dropping to 48.5 points in January from 48.9 points in December.

Meanwhile, shares in French banks dropped on Tuesday following a downgrade by rating agency Standard & Poor's.

Crédit Agricole dropped 2.69 per cent in early trading to 5.07 euros and Société Générale dropped 3.20 per cent to 22.03 euros after having their ratings dropped by one notch to A from A+.

BNP Paribas, which had its rating confirmed at AA-, dipped 0.07 per cent to
36.04 euros.

BPCE, which includes the Caisse d'Epargne and Banque Populaire retail banks, also had its rating dropped by one notch to A from A+.

Elsewhere, European finance ministers meeting in Brussels have told Greece to stop dragging its feet on economic reforms if it wants a new bailout while urging bank creditors to make more sacrifices to tame the country's debt.

The eurozone wants a written pledge from the technocrat-led government in Athens as well as other political parties before unlocking a new 130-billion-euro rescue for the country.

Eurozone leaders offered Greece last year a new, 130-billion-euro rescue package conditioned on a debt writedown with private lenders worth 100 billion euros.

The goal is to reduce the Greek debt mountain from around 160 per cent of gross domestic product currently to about 120 per cent in 2020.

Negotiators delayed late on Monday the deadline for a deal on a debt reduction until 13 February.