RTTNews - The major European markets may open higher on Tuesday following a continued rise in crude oil prices and strong Asian cues. That said, sharp gains of the previous session may lead to some profit taking. Investors look forward to the final reading of U.K. GDP data for the first quarter and euro zone CPI data amid fresh signs that the domestic economy may begin a recovery later this year.
On Monday, the major U.S. averages kicked off the week on a strong note amid some bargain hunting despite any prominent triggers. Demand for energy stocks due to higher oil prices and portfolio reshuffling before the close of the second quarter also offered some support. However, volumes were rather thin as some traders chose to stay on the sidelines ahead of the release of key economic data later in the week, which include data on home prices, consumer confidence, manufacturing and employment. The Dow Jones Industrial Average ended up 1.08%, the Nasdaq Composite rose a modest 0.32% and the S&P 500 index added 0.91%.
Crude oil futures jumped over 3% in New York trading on Monday amid tensions in crude-producing Nigeria and on reports that China plans to rapidly increase its strategic crude oil reserves. China is reportedly planning to increase strategic crude oil reserves by 60% to 270 million barrels during the next five years. Gains in equity markets on renewed investor optimism about the prospects for an economic recovery also offered support. The US Energy Information Administration revised up its April U.S .oil demand estimate by 1.18%, though the data showed consumption was still 6.56% lower than a year ago. After settling at $71.49 a barrel on Monday, crude oil further extended its rise towards $73 a barrel in Asian trading.
Meanwhile, the European markets rose for the first time in three days on Monday, as heavily weighted energy stocks gained on firmer crude oil prices and financial stocks climbed on broker upgrades. The FTSEurofirst 300 index of pan-European blue chips closed 1.78% higher, while the narrower DJ Stoxx 50 index rose 1.74%. Around Europe, the U.K.'s FTSE 100 index rose 1.25%, France's CAC 40 index surged up 2.04% and Germany's DAX index climbed 2.27%.
Consumer confidence in the U.K. improved in June, with the index rising to minus 25 from minus 27 in the previous month, the latest survey from the Gfk NOP showed Tuesday. The index was in line with economists' expectations. At the same time, the index came in better than the last year's reading of minus 34. Following the release, the British pound rose to a 4-week high against the US dollar and a 2-week high against the yen in early trading. The pound also edged higher against its other major counterparts.
Separately, while Germany's Federal Statistical Office announced that the ILO jobless rate stood at 7.7% in May, the same pace as in the previous month, the Nationwide Building Society said house prices in the U.K. rose 0.9% in June from the prior month, following a 1.3% increase in May. On a yearly basis, house prices were down 9.3% versus May's 11.3% decline.
In corporate news, German conglomerate Siemens AG announced the appointment of Michael Reitermann as chief executive officer of Siemens Healthcare's U.S. Organization, succeeding incumbent CEO Heinrich Kolem, effective July 1.
German luxury sports car maker Porsche rejected a merger offer by Volkswagen and is in talks with the Gulf state of Qatar on how Qatar might make its investment, reports suggest. France's biggest drug maker Sanofi-Aventis SA said that studies published in the journal Diabetologia do not indicate an association between its diabetes drug 'insulin glargine' and cancer.
Europe's biggest supplier of building materials Cie. de Saint-Gobain SA said that 64.8% of the total dividend will be paid in stock. Car maker PSA Peugeot Citroen increased its exchangeable bond offering to 575 million euros from 500 million euros.
British Airways enters crunch talks with unions in an attempt to prevent strike action this summer, but accusations are already flying, even before the two sides face each other, the Times reports.
For comments and feedback: contact email@example.com