The major markets in Europe are poised to open higher on Thursday, extending yesterday's rally, mirroring the gains on Wall Street, where the major indices advanced sharply on positive economic data and increasing optimism that the downward growth momentum is slowing down. Positive global cues, the ongoing G20 meeting in London, and a surprise increase in UK house prices during March 2009 might also influence trading across the region. Trading over the course of the session may also track the European Central Bank's interest rate decision due out later in the day.
On Wednesday, the Dow closed up 153 points or 2.01% at 7,762, the Nasdaq gained 23 points or 1.51% to 1,552, and the S&P 500 added 13 points or 1.66% to finish at 811.
The European markets also ended in positive territory on Wednesday. The FTSEurofirst 300 index of pan-European blue chips closed 1.56% higher at 745 points, while the narrower DJ Stoxx 50 index rose 1.11% to 1,836 points.
Around Europe, the U.K.'s FTSE 100 index rose 0.75% to 3,956, while France's CAC 40 index climbed 1.15% to 2,840 and Germany's DAX index surged up 1.13% to 4,131.
On the economic front, a monthly report from the Nationwide Building Society showed that U.K. house prices increased unexpectedly in March for the first time since October 2007. House prices increased 0.9% on a monthly basis in March, reversing a 1.9% fall in February. Economists were looking for another 1.5% decrease for March. Annual decline in house prices was 15.7% in March compared to 17.6% drop in February.
Meanwhile, the European Central Bank is widely expected to slash interest by 50 basis points to a historic low of 1%. In addition, the ECB might also resort to some quantitative measures to combat the recession in the region.
The outcome of the G20 meeting and the other policy measures by the ECB are likely to influence the optimism about global recovery and drive the markets over the next few trading sessions. Corporate earnings for the first quarter and the broader economic picture are still a cause of concern for the markets.
In corporate news, the biggest salt maker in Europe, K+S stated that it has agreed to buy Morton Salt from Dow Chemical for $1.675 billion. Automakers will continue to attract attention following lower-than-expected decline in sales during March 2009.
Barry Callebaut AG (BYCBF.PK) reported that six months net profit climbed 23.2% to CHF 143.4 million from CHF 124.4 million last year. Operating profit for the six-month period rose 17.6% to CHF 218.6 million from CHF 200.4 million in the prior year. Sales revenue for the six-month period was CHF 2.54 billion, compared to CHF 2.59 billion in the previous year.
Tate & Lyle PLC (TATE.L) said that it expects profit before tax for the year to 31 March 2009 to be marginally below its previous guidance. The company further stated that the mix of profits has reduced the tax rate so earnings per share are expected to be broadly in line with market expectations.
Mothercare Plc (MTC.L) announced that its fourth quarter total group sales rose 5.6%, while UK like-for-like sales increased 3.7%. Total UK sales for the quarter climbed 1.3% and International retail sales were up 40.0%.
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