News Column

European Stocks Seen Steady On US Optimism

July 3, 2014

VIENNA (Alliance News) - European stocks are seen opening flat to slightly higher on Friday as a strong US jobs report and dovish comments from the European Central Bank Chief boosted investors' appetite for riskier assets. That said, trading activity will likely remain light after recent sharp gains and amid the Independence Day holiday in the US

The economic calendar is relatively light today, with investors awaiting Germany factory orders data later in the day for further clues on the outlook for monetary policy.

The Asian markets are trading mixed, with the key benchmark indexes in Australia, Hong Kong, India, Indonesia, Japan, New Zealand and Singapore rising between 0.1% and 0.7%, while the markets elsewhere are subdued.

The strong US jobs report has given investors a reason to believe that the Federal Reserve will raise interest rates sooner rather than later. The dollar held firm at one-week highs in Asian deals, pressuring commodities such as crude, copper and gold.

In news out of Ukraine, the country's new defense minister on Thursday pledged to restore the country's territorial integrity by retaking Crimea, which was annexed by Russia in March. The EU, meanwhile, voiced concerns over the continued violence in eastern Ukraine as well as its impact on the security of journalists and freedom of expression in the region.

In corporate news, the deal by the French government to acquire a 20% stake in Alstom SA) from Bouygues SA tantamounts to concerted action, the French stock regulator said.

Agribusiness company Archer Daniels Midland Co. is nearing a deal to acquire privately-held German flavors and ingredients company Wild Flavors GmbH in a deal valued at about 2.5 billion euros or USD3.4 billion, the Bloomberg reported.

French oil services provider Technip SA has been awarded a contract by Total E&P UK for the Edradour Subsea Development, located about 75 kilometers North West of the Shetland Islands, in around 300 meters of water.

BioAlliance Pharma SA said it has won the US FDA approval for Beleodaq used to treat patients with relapsed or refractory peripheral T-cell lymphoma.

Sports-car maker Porsche AG, owned by German auto giant Volkswagen, said it increased its stake in engineering group Bertrandt AG by nearly four percentage points to about 29%.

The European markets edged higher on Thursday as investors cheered strong US jobs data and dovish comments from the European Central Bank Chief. Pledging to keep euro area interest rates low for an extended period of time, ECB President Mario Draghi kept the door open to additional stimulus if inflation headed lower still. The German DAX rallied 1.2%, France's CAC 40 gained a percent and the FTSE of the UK added 0.7%.

US stocks rose overnight after the latest jobs report showed a bigger-than-expected surge in job creation last month pushing the jobless rate down to almost six-year low and effectively dispelling recent fears about the economy's health.

Initial jobless claims rose marginally last week and service sector activity grew at a slower rate than expected in June, while the country's trade deficit narrowed by more than expected in May, separate reports showed. While the Dow rose half a percent to close above 17,000 for the first time ever, the tech-heavy Nasdaq and the S&P 500 gained about 0.6% each.

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Source: Alliance News

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