Alexa

European markets up modestly after solid euro data

European markets up modestly after solid euro data

European stock markets rose modestly Monday despite earlier losses in Asia as investor sentiment was buoyed by upbeat European economic data, which stoked hopes that the worst of the recession has passed.
Germany's DAX index was 39.57 points, or 0.8 percent, higher at 4,816.04 while France's CAC-40 rose 13.19 points, or 0.4 percent, to 3,142.92. The FTSE 100 index of leading British shares was up 15.01 points, or 0.4 percent, at 4,256.02.
The gains came after the European Union's official economic sentiment index for the 16 countries that use the euro rose by 3.1 points to 73.3 in June, well above the 71 reading expected in the markets.
Analysts said the data provided further clear evidence that the euro zone economy is no longer in free fall and that the contraction in the second quarter will be less than that experienced in the first three months of the year.
"June's rise _ the third in a row _ adds to the evidence that the cyclical trough is already behind us and that the euro zone economy is likely to contract at a slower rate in Q2," said Daniele Antonucci, European economist at Capital Economics.
In the first quarter, the euro zone shrank by 2.5 percent from the previous three months as demand for its high-value exports, like cars and heavy machinery, slumped with the sharp falls in global trade volumes.
The stock market, whose rally since March has faltered in the wake of some worse than expected data, will look to key economic news towards the end of the week for more direction.
Thursday will be at the forefront of investors' attention as it brings the European Central Bank's latest interest late decision and the closely-watched U.S. non-farm payrolls. Analysts expect June's U.S. unemployment rate to rise around 0.3 of a percentage point to 9.7 percent _ President Barack Obama has warned that it will top 10 percent in the coming months.
Equities rose from the middle of March until the start of June on hopes that the U.S. economy in particular will recover from recession sooner than anticipated. Many investors saw stock valuations as particularly cheap and started buying into the market. However, a run of underwhelming economic news brought an abrupt end to the rally and altered the general mood prevailing among investors.
Before Thursday, the markets will likely be fairly volatile given the coincidence of the month-end and the quarter-end, when many investors may look to book profits accumulated or look to stake out some longer-term positions.
"The imminent month-end and usual accompanying rounds of fundamental data should ensure we see more activity in the near term," said Buckland.
Earlier in Asia, Japan's Nikkei 225 index slid 93.92 points, or 1 percent, to 9,783.47, while Hong Kong's Hang Seng index declined 71.75 points, or 0.4 percent, to 18,528.51. Meanwhile, Australia's benchmark sank 0.4 percent to 3,886.9, while South Korea's Kospi slipped 0.4 percent to 1,388.45. Markets in mainland China and India rose.
U.S. stock index futures were somewhat lower. Dow futures were down 4 points, or 0.1 percent, at 8,369 while the broader Standard & Poor's 500 futures fell 0.8 point, or 0.1 percent, to 913.10.
Oil prices edged above $69 a barrel. Benchmark crude for August delivery gained 12 cents to $69.28 a barrel in electronic trading on the New York Mercantile Exchange.
Meanwhile, the dollar rose 0.2 percent to 95.46 yen while the euro slipped 0.4 percent to $1.4004.
____
AP Business Writer Malcolm Foster in Bangkok contributed to this report.


Updated : 2021-01-20 16:25 GMT+08:00