RTTNews - Friday, the major European markets may bounce back after losses in the previous session on the back of solid gains on Wall Street overnight and mildly positive Asian cues amid higher crude oil, base-metal and gold prices.
Investors were also relieved after the U.S. Federal Reserve Chairman Ben Bernanke emerged unscathed from a grilling by a Congress committee, withstanding a barrage of pointed questions on encouraging Bank of America to go forward with its planned purchase of Merrill Lynch late last year.
Shrugging off disheartening employment data, U.S. stocks closed higher on Thursday, thanks in part to strong demand for the Treasury Department's latest bond auction. Bargain hunting in a number of embattled sectors that have trended lower for much of the past month also helped the recovery. Separately, a report from the commerce department indicated that first quarter GDP contracted by a revised 5.5 percent compared to the 5.7 percent decrease that had been reported. The major averages rose over 2% each, with the Dow snapping a four session losing streak.
Crude oil futures rebounded sharply on Thursday amid more violence in Nigeria and a rally in gasoline futures on hopes of economic recovery. After settling higher at $70.23, up $1.56 a barrel in New York trading overnight, crude oil extended its gains towards $71 a barrel in Asian trades Friday.
Meanwhile, the European markets fell on Thursday, as banking stocks retreated and a government report showed first-time claims for unemployment benefits in the U.S. unexpectedly increased last week. The FTSEurofirst 300 index of pan-European blue chips closed 0.92% lower, while the narrower DJ Stoxx 50 index fell 1.15%. Around Europe, the U.K.'s FTSE 10 index fell 0.64%, France's CAC 40 index slipped 0.68% and Germany's DAX index dropped 0.73%.
Among the European economic news releases scheduled for Friday, a final report from the French statistical office INSEE is expected to confirm its preliminary estimate that showed a contraction in the first quarter following GDP declines in previous three quarters.
Germany's Federal Statistical Office said in a report that the import price index dropped 10.4% year-over-year in May compared to the 8.6% fall in the previous month and the 10.3% drop estimated by economists. This was the biggest price decline since February 1987. A year ago, import prices were up 6.9%.
Amid the release, the euro edged down against the British pound, while showed strength against its other major counterparts. At 2:05 am ET, the euro was quoted at 1.4045 against the US dollar, 0.8558 versus the British pound, 1.5317 versus the Swiss franc and 134.78 against the Japanese yen.
Separately, Estonia's trade deficit narrowed to EEK 1.7 billion in April from EEK 3.5 billion deficit in the previous year, the Statistics Estonia said Friday.
In corporate news, European bank UBS AG said Friday it would raise about 3.8 billion Swiss francs ($3.5 billion) by selling 293.3 million shares for 13 francs a share to a small number of institutional investors.
Volkswagen AG is exploring a potential cooperation deal with Japan's Suzuki Motor Corp. to improve the German manufacturer's line-up of ultra small cars, reports suggest.
Europe's biggest natural-gas network GDF Suez said Thursday that it has finalized the sale of its 32.81% equity stake in United Power Company to the Sultanate of Oman.
French insurance group CNP Assurances agreed to pay up to EUR590 million for a 50% stake in Barclays Plc's life insurance unit Vida y Pensiones, which operates in Spain and Portugal.
Verenium Corp. and BP plc said that their jointly-owned, commercial cellulosic ethanol project, located in Highlands County, Florida, has been selected by the U.S. Department of Energy to enter the due diligence phase of its Title XVII Loan Guarantee Program.
Europe's second-largest steel group Corus' Indian parent Tata Steel reported a 60 percent drop in its FY09 net profit due to falling prices and demand, especially in Europe.
Berkeley Group Holdings Plc reported full-year profit after taxation of £86.13 million, compared to £137.83 million a year ago. Earnings per share were 65.6 pence, lower than 114.1 pence last year.
Micro Focus International Plc said Friday that it has been notified by Borland Software Corp. that it has received a preliminary non-binding indication of interest from another party.
Forth Ports Plc issued pre-close trading update for the six months ending June 30, 2009. The company expects first half results to be in line with last year with the exception of Nordic, its materials recycling business, and Tilbury Container Services which have been more severely affected by the economic downturn.
Likewise, Filtrona Plc issued a pre-close trading statement ahead of its half year results, saying that its overall year to date performance was in line with the Board's expectations.
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