News Column

European Stocks Seen Rising As China Slowdown Concerns Ease

May 7, 2014



VIENNA (Alliance News) - European stocks are likely to open higher on Thursday, after data showed Chinese exports and imports returned to slight growth in April, beating economist forecasts and easing concerns over demand growth in the world's second-largest economy. Overseas shipments increased 0.9% from a year earlier, while imports grew 0.8%, after an 11.3% slump in March.

Asian stocks are broadly higher, with Japanese shares pacing gains after sharp losses in the previous session, as investors cheered Chinese data and drew comfort from dovish comments by the US Federal Reserve chief and signs of easing tensions in Ukraine. The safe-haven yen weakened on the back of improving risk appetite, while the Australian dollar rose to a two-week high on upbeat jobs data.

Closer home, investors eye German industrial production data as well as monetary policy decisions from the European Central Bank (ECB) and Bank of England (BoE) later in the day for further direction.

The BoE is widely expected to leave its benchmark rate unchanged at a record low 0.5% and keep the size of its asset purchase program on hold at 375 billion pounds. The ECB is also expected to maintain the status quo and reiterate its concerns that a strong euro could pose a threat to economic recovery.

In corporate news, Switzerland-based offshore drilling contractor Transocean reported a 42% surge in profit for the first quarter from last year, reflecting higher revenues as well as lower costs and expenses.

Lanxess AG said it would issue new shares equivalent to 10% of its equity capital to fund restructuring measures.

Deutsche Telekom AG said its first-quarter net profit more than tripled to 1.817 billion euros from 564 million euros.

Reinsurer Munich Re posted 4.7% lower consolidated profit of 924 million euros for the first quarter 2014, compared with 970 million euros in the year-ago period.

Toshiba Corp plans to buy French speed-train maker Alstom's power grid business for an estimated several hundred billion yen if General Electric Co completes its acquisition of Alstom's energy business, the Nikkei newspaper reported.

Standard Chartered PLC. reported a high single digit percentage decline in the group's first-quarter operating profit, in line with expectations.

Swiss HR firm Adecco SA reported first-quarter net income attributable to Adecco shareholders of 110 million euros, compared to 67 million euros last year.

Advanced Metallurgical Group N.V. reported first-quarter profit before income tax of USD6.63 million, compared to USD5.67 million last year.

European stocks rebounded from early losses to finish with modest gains on Wednesday, bolstered by hopes of a diplomatic solution to the Ukraine crisis after Russian President Vladimir Putin urged pro-Russian rebels fighting in east Ukraine to postpone a referendum for "state sovereignty" planned for Sunday. While the UK'sFTSE 100 ended largely unchanged, the German DAX rose 0.6% and France's CAC 40 gained 0.4%.

US stocks closed mostly higher overnight, although weak earnings from some technology companies dragged the Nasdaq into the red for the second day in a row. While comments from Fed chief Yellen offered no surprises, Putin's claims that there were no Russian troops left on the Ukrainian border helped underpin risk sentiment. The Dow rose 0.7% and the S&P 500 advanced 0.6%, while the Nasdaq slid 0.3%.



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Source: Alliance News


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