The major markets across Europe are poised to open higher on Monday morning, extending the gains from Friday, on all-round optimism that the worse for the global markets is over and the downward momentum in economies across the world is slowing down. Positive comments by Fed Chairman Ben Bernanke and U.S Treasury Secretary Timothy Geithner and strong trading across Asian markets are likely to exert positive influence on Europe. The markets are unlikely to react to the launch of a rocket by North Korea on Sunday, defying warnings from the International community to refrain from the launch.
Bernanke, while speaking at Charlotte on Friday, said that the Federal Reserve will use all possible tools at its disposal to help the U.S economy come out of the recession. While not offering any timeline for recovery of the U.S economy, Bernanke stated that the initiatives are beginning to yield positive results. He pointed out the increase in refinance activities and drop in mortgage rates as examples of response for the Fed initiatives.
U.S. Treasury Secretary Timothy Geithner, in an interview to the CBS Program Face the Nation, said that there were encouraging signs that the recession-hit U.S. economy is showing signs of recovery. He also added that it was too early to say if he was going to ask Congress for more stimulus money as the economic stimulus package announced so far slowly makes it mark in the economy. He said the government stands ready to force out banking bosses and install new management if their companies have to return for more bailout money.
In the U.K., Prime Minister Gordon Brown is reported to have consultations with Mervyn King, the Governor of Bank of England and Alistair Darling, the Chancellor of the Exchequer regarding the steps to be taken to implement the financial rules agreed upon by the world leaders in G20 meeting to revive the economy.
On Friday, the Dow closed up 39.51 points or 0.5% at 8,018, the Nasdaq closed up 19.24 points or 1.2% at 1,622 and the S&P 500 closed up 8.12 points or 1% at 842. Across Europe, the FTSEurofirst 300 index of pan-European blue chips closed 1.26% lower at 772 points, while the narrower DJ Stoxx 50 index fell 1.69% to 1,896 points. The U.K.'s FTSE 100 index dropped 2.31% to 4,030 and France's CAC 40 index slipped 1.11% to 2,959, while Germany's DAX index rose 0.07% to 4,385.
On the economic front, the Eurozone sentix investor confidence is due for release at 4.30 A.M ET. The index is expected to rise to minus 40.4 in April from minus 42.7 in March. In addition, Eurozone producer prices and retail sales reports are due from the Eurostat. Producer prices are forecast to drop 1.5% annually in February, following a 0.5% decrease in January.
Technology related stocks are likely to witness action following reports of a fallout in the negotiations between IBM and Sun Microsystems.
Financial services firm Fortis might witness action after the Chairman announced that the company is contemplating to abandon dual structure and opt for single listing in Brussels.
Unilever, the second largest manufacturer of consumer products in the world, revealed plans to close its factory in Framingham, Massachusetts, which might affect 201 jobs.
Cobham Plc (COB.L) said it has reached agreement to acquire the share capital of Argotek, Inc., a privately owned company based in the USA, for a consideration of US$36.25 million. The acquisition is expected to complete in the first half of the year.
CryptoLogic Ltd. (CRYP, CRY.TO, CXY.TO, CRP.L)announced that it has signed a multi-year deal with Gala Coral to provide at least 10 of its most popular online slot games. The first games are scheduled to go live on Coral.co.uk, Eurobet.com, Galacasino.co.uk and galabingo.com in the second quarter of 2009, with a complete roll-out of the full 10-game suite over the coming months.
AstraZeneca (AZN, AZN.L) announced that the Competition Authority in Sweden has approved the divestment to GlaxoSmithKline (GSK, GSK.L) of a portfolio of over-the-counter products. Under the agreement, AstraZeneca receives SEK 1770 million, approximately $220 million at current exchange rates.
PartyGaming Plc (PRTY.L) said it has signed agreement to launch online poker tournament service in Italy for INTRALOT S.A. As per the terms of the deal, INTRALOT and PartyGaming will also cooperate to explore opportunities for providing online gaming services in specific markets around the world.
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