News Column

European Stocks Seen Steady After Recent Losses

July 10, 2014

VIENNA (Alliance News) - European stocks are seen opening slightly higher on Thursday as investors hunt for bargains following recent losses on the back of weak data and concerns over the stability of Portugal's banking industry.

Portugal's central bank reassured investors that the solvency of embattled bank Banco Espirito Santo is "solid" and that it had taken steps to avoid contagion from Grupo Espirito Santo. Shares of Banco Espirito Santo were suspended yesterday after sliding more than 17%.

In economic releases, German price data for June will be released later in the day, with Statistical Office Destatis expected to confirm its annual and monthly consumer price inflation readings at 1% and 0.3%, respectively. The Bank of France is due to release its current account balance report for May at 2.45 am ET.

Across the Atlantic, quarterly earnings from financial giant Wells Fargo as well as speeches by Federal Reserve officials, Charles Plosser, Charles Evans and Dennis Lockhart may influence trading sentiment amid a lull in economic data.

Asian stocks are muted, with Japanese shares falling to a two-week low on a stronger yen amid signs of a deepening economic slowdown in the euro zone and mounting worries over the region's broader financial health. The safe-haven yen held steady against the dollar and euro, while gold prices inched up, adding to sharp overnight gains.

In domestic corporate news, Unilever PLC said it has sold its Slim-Fast brand to Kainos Capital for an undisclosed amount.

Home appliances maker Whirlpool Corp. has signed share purchase agreements with Fineldo SpA and the Merloni family to acquire a majority stake in Italian home appliances maker Indesit Co. SpA for a total of 758 million euros, or USD1.04 billion.

French pharmaceutical company Ipsen SA and Galderma, a global healthcare company focused on dermatology and skin health, said they have significantly expanded the scope of their neurotoxin partnership.

Car maker PSA Peugeot CitroËn and Banque PSA Finance signed a binding framework agreement with Santander Consumer Finance, which would establish a partnership between the two groups in 11 countries.

Tobacco company Reynolds American Inc. is nearing a deal to acquire smaller rival Lorillard Inc. with the approval of British American Tobacco PLC, the Bloomberg reported, citing people with knowledge of the matter.

European stocks came under heavy selling pressure on Thursday, hit by worries about stress in the euro-zone banking sector after Portuguese lender Banco EspÍrito Santo missed payments on some of its short-term debts. Weak industrial output data from France and Italy also added to the sense of gloom. The German DAX fell 1.5%, France's CAC 40 dropped 1.3% and the UK'sFTSE 100 shed 0.7%.

US stocks fell modestly overnight, with rising bond yields, worries about Europe's banking system and mixed trade data out of China weighing on the markets. Solid jobless claims numbers helped to limit the downside to some extent. The Dow and the S&P 500 slid about 0.4% each, while the tech-heavy Nasdaq dropped half a percent.

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Source: Alliance News

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