News Column

European Stocks Seen Steady After Selloff

July 8, 2014

VIENNA (Alliance News) - European stocks are seen opening on a steady note following three days of losses. Commodity-related stocks may inch higher, tracking an uptick in commodity prices as the dollar came under selling pressure ahead of the release of minutes from the Federal Reserve's June policy meeting, due later in the day.

Asian stocks are broadly lower, with the regional benchmark index falling to a one-week low, even as official data showed China's producer price index fell in June at the slowest pace in more than two years, easing fears of deflationary pressures in the world's second-largest economy. The consumer price index rose 2.3% in the month, missing forecasts for a 2.4% rise.

Amid concerns about stock valuations, investors await the FOMC minutes and a string of US corporate earnings reports this week for further direction. Alcoa unofficially kicked off the US earnings season with strong results after the US closing bell, lifting its shares as much as 2% in after-hours trading.

On the economic front, the British Retail Consortium reported that shop prices in the UK fell 1.8% in June from a year earlier, falling for the 14th straight month. Prices declined at the fastest pace in nearly eight years following the 1.4% contraction in May.

Britain's economic recovery expanded at a faster pace in the second quarter despite a surprise fall in manufacturing output in May, according to data released by the National Institute of Economic and Social Research late Tuesday. The think tank estimated second-quarter growth at 0.9%, faster than the 0.8% growth seen in the first quarter.

ECB officials including President Mario Draghi are scheduled to speak later in the day.

In corporate news, German sportswear maker Adidas is nearing a kit sponsorship deal with English football club Manchester United PLC, outbidding rival Nike, Inc. with a record offer of about 60 million British pounds or USD103 million per year, media reports suggest.

French cosmetics giant L'Oreal S.A. said that it has finalized the repurchase of 8% of its common stock that was owned by Swiss food giant Nestle SA.

Catering and vouchers company Sodexo S.A. said its revenues for the nine months totaled 13.822 billion euros, compared to 14.214 billion euros last year.

British lender Barclays PLC plans to sell it natural resource-focused private equity unit, the Bloomberg reported, citing three people with knowledge of the matter.

Deutsche EuroShop AG said Wilhelm Wellner, Chief Financial Officer of Railpool GmbH in Munich, would become its new chief executive officer, succeeding Claus-Matthias BÖge.

European stocks fell for a third day on Tuesday, as weak German trade and UK industrial output data coming on the heels of a surprisingly steep drop in German industrial production the day before stocked fears the region's economic recovery is fizzling out. Airline stocks came under heavy selling pressure after Air France-KLM slashed its profit outlook. The German DAX and France's CAC 40 dropped about 1.4% each, while the FTSE of UK lost 1.3%.

US stocks fell for a second day in a row Tuesday as investors positioned themselves for corporate earnings reports. Investors also weighed speeches from key Fed officials ahead of the release of the minutes of the June FOMC meeting. The Dow and the S&P 500 slid about 0.7% each, while the tech-heavy Nasdaq fell 1.4%.

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Source: Alliance News

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