News Column

European Stocks Seen Flat-to-higher

June 23, 2014

VIENNA (Alliance News) - European stocks are seen opening flat to slightly higher on Tuesday as investors reassess US growth prospects in the wake of solid housing and manufacturing data released overnight. Investors await US reports on home prices, new home sales and consumer confidence later in the day for further signs of a strengthening economy.

Closer home, German business climate and UK mortgage approvals data are slated for release in the European session. The IFO institute's business climate indictor is seen falling to 110.3 in June from 110.4 in May, while the number of UK mortgage approvals is expected to decrease to 41,000 in May from 42,173 in April.

Asian stocks are trading mostly higher after struggling for direction earlier in the day on the back of downbeat economic reports from the euro zone. Japan'sNikkei edged up marginally, South Korea's Kospi average rose over a percent and the markets in China and Hong Kong are up less than half a percent each, while Australia's S&P/ASX 200 eased 0.3% and New Zealand's NZX-50 slipped 0.1%.

Energy stocks around the region drifted lower after data showed oil exports from Iraq's southern regions averaged a near record 2.53 million barrels per day in June despite attacks by Sunni Islamist insurgents. Brent crude prices slipped below USD114 per barrel in Asian deals after recording their largest single-day decline in five weeks on Monday.

The situation in Iraq remains tense as radical Sunni militants continue their march toward Baghdad. After meeting with top Sunni, Shi'ite and Kurdish political leaders in Baghdad on Monday, US Secretary of State John Kerry pressed the country's leaders to cede more power to rivals and forge a political solution to the crisis.

Meanwhile, United Nations Secretary-General Ban Ki-moon has hailed a peace plan put forward by Ukrainian President Petro Poroshenko, and said he hopes it will reduce violence and tensions in the eastern part of the country. The peace plan reportedly involves proposals for decentralizing power, holding early elections, and creating a buffer zone on the Ukrainian-Russian border.

In corporate news, French construction giant Vinci SA said that a consortium comprising its subsidiary QDVC and French speed-train maker Alstom SA has won a contract worth 2 billion euros, or USD2.72 billion, for the final works phase of the Lusail light rail transit system for the city of Lusail in Qatar.

Oilfield services provider Technip SA said it has received two contracts from Maersk Oil for the Valdemar & Roar Gas Lift project as well as the Rolf Replacement Pipeline project.

The European markets fell on Monday, weighed down by disappointing manufacturing and service sector data from the euro zone and raising sectarian tensions amid continued fighting in Iraq. The German DAX fell 0.7%, France's CAC 40 lost 0.6% and the UK'sFTSE 100 slid 0.4%.

US stocks ended almost flat overnight, as investors digested mixed manufacturing data from China and Europe and kept a wary eye on developments in major oil-producer Iraq. Closer home, US manufacturing expanded at its fastest rate in more than four years in June, while sales of previously-owned homes posted the best monthly gain in nearly three years, separate reports showed.

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Source: Alliance News

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