RTTNews - After a mixed performance on Friday, European stocks are likely to open stronger on Monday on hopes of an earnings recovery, with favorable Asian cues and the higher U.S. index futures offering support.
Asian stocks rose further on Monday led by technology, financials and energy-related stocks. Fairly heavy buying was seen in healthcare, industrial and automobile sectors as well on optimism that the worst phase may already have ended for the global economy.
On Friday, Wall Street rebounded from lower levels and ended around the unchanged line, shrugging off some weak quarterly numbers and a mixed report from Reuters and the University of Michigan, which showed that their reading on consumer sentiment for the month of July was upwardly revised from the preliminary reading but still came in well below the previous month. The Nasdaq ended in the red for the first time in nearly two weeks, slipping by 0.4% to 1,966, while the Dow Jones Industrial Average and the S&P 500 index rose about 0.3% each.
The major European markets also closed on a mixed note Friday, with the German DAX index and the French CAC 40 index finishing down by 0.4% and 0.2%, respectively, as technology stocks slipped after Ericsson reported a sharp drop in second quarter profit. The FTSE 100 index of the U.K. edged up by 0.4%.
Crude Oil finished a choppy session higher at $68.05 a barrel, up 89 cents on Friday, as traders continued to show optimism the global economy is on the mend, which would improve energy demand. In Asian trading on Monday, light sweet crude for September delivery extended its gains towards $69 a barrel on optimism about a global economic recovery.
On the economic front, the average asking price for a house in the United Kingdom was flat for the third straight month in July compared to the previous month. according to property surveying group Hometrack. On an annual basis, house prices were down 7.7 percent compared to the 8.7 percent decline in June.
Demand for housing in London surged 52 percent over the first half of the year while demand in the southeast portion of the country jumped 46 percent. The increase in demand in the northeast was 20 percent, with a 19 percent gain in Wales.
Germany's Federal Statistical Office announced on Monday that the import price index dropped 11.3% year-over-year in June, compared to the 10.4% fall in the previous month. This was the steepest price decline since February 1987. Economists were looking for a decline of 11%. A year ago, import prices were up 7.9%.
Amid the release of the German June import price index report, the euro showed mixed trading against its major counterparts. While the euro gained against the dollar, franc and the yen, it slipped versus the pound.
In corporate news, Aviva plc is to launch a new investment fund with as much as £1 billion to buy and rent out swathes of new-build residential property in partnership with CB Richard Ellis, the property consultancy, and a major US residential manager, the Financial Times reported on Sunday.
Volkswagen AG is examining a capital raising of up to 4 billion euros or $5.7 billion, as part of a plan to buy Porsche, the Financial Times said separately.
The amount of debt sports car maker Porsche Automobil Holding SE (PAH3.XE) faces has increased to 14 billion euros from an previously estimated 10 billion euros, German magazines Spiegel and Focus said over the weekend, citing unidentified bankers.
Barclays Plc's securities unit has expanded its work force in Japan by about 200, as it plans to derive around 50 percent of its revenue from outside the U.K., the FT said.
Courts in the U.S. and Canada are likely to approve Tuesday the sale of Toronto-based Nortel's wireless business to Sweden's Ericsson last week.
French media technology group Thomson SA said it had reached a debt-for equity restructuring agreement with senior creditors to reduce its debt.
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