RTTNews - The major markets across Europe are likely to open weaker on Monday, taking cues from Wall Street where major indices ended in negative territory on Friday amid concerns about the pace of global recovery. Holiday for the U.S markets, successful nuclear test by North Korea and lackluster trading in Asian markets might also weigh on the markets.
There were no major economic data on Friday in the U.S. Traders hesitated to take positions ahead of the long Memorial Day weekend. Bargain hunting drove gains into the late afternoon, but the major averages fell uniformly heading down the home stretch. The dollar continued to take a brutal beating, as traders continued their exodus from the world's reserve currency amid speculation that the global economy is on the mend. While the broad outlook is one of optimism, lack of supporting data and mixed signals from the economy are weighing on the near-term outlook, forcing the major indices to end in negative territory.
The Dow closed lower by 14.81 points or 0.14% at 8277, the Nasdaq finished down by 3.24 points or 0.19% at 1692, and the S&P 500 slipped by 1.33 points, or 0.15%, to 887.
Mixed trading is being witnessed across the markets in Asia, on global economic concerns. Nikkei recovered from early losses following nuclear test in North Korea and is trading in positive territory on optimism about the economy.
The markets in Europe continued to decline for the second day on Friday following economic data that confirmed that U.K is caught in a severe recession. The British economy shrank 1.9% in the first quarter compared with the previous quarter, un-revised from the previous estimate released on April 24, the Office for National Statistics reported. This was the largest decline since the third quarter of 1979. The economy had contracted 1.6% in the fourth quarter and 0.7% in the third quarter of 2008. Thus, gross domestic product dipped for the third straight quarter, signaling a severe recession.
The FTSEurofirst 300 index of pan-European blue chips closed 0.18% lower at 856 points, while the narrower DJ Stoxx 50 index fell 0.21% to 2,094 points. The U.K.'s FTSE 100 index climbed 0.46% to 4,365, while France's CAC 40 index rose 0.33% to 3,228 and Germany's DAX index surged up 0.37% to 4,919.
On the economic front, German Ifo business confidence survey. a monthly business confidence survey is due from the Munich-based Ifo Institute for Economic Research. German business confidence is seen at 84.9 in May, up from 83.7 in April. Meanwhile, the expectations index is forecast to rise to 85.4 from 83.9 and current assessment to improve to 84.5 from 83.6.
In corporate news, Fiat SpA might be in focus following news that the German Government in studying the offers submitted by the automaker to buy the Opel unit from General Motors. Markets might react to news that Areva SV, engaged in the manufacture of nuclear reactors, is expected to announce plans to hive off its transportation and distribution unit in June, reports say.
Retail stocks might witness action after department store chain in Germany, Arcandor AG revealed that the proposal to merge itself with Metro AG might not materialize till 2010.
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