RTTNews - European stocks may drift lower amid some profit taking on Monday after a four-week rally took Britain's FTSE 100 index to a 10- month high on Friday. That said, Asian stocks mostly edged higher on Monday with the Japanese Nikkei moving past the 10,500 mark for the first time in ten months, buoyed by strong regional economic data and hopes of a swift economic recovery in the world's largest economy.
On the economic front, a report by the Statistics Finland said industrial output dropped a working day adjusted 20.3% year-over-year in June, after falling 26.3% in the preceding month. Output continued to fall in all industries, with the forest industry showing the steepest decline in output of 35.4%. Moreover, double-digit declines were also seen in the metal, chemicals, utilities, as also electrical and electronics industries.
Separately, the Statistics Estonia said in a preliminary report that trade deficit stood at EEK 0.7 billion in June, widening from a deficit of EEK 0.5 billion in the previous month.
A survey from the Confederation of British Industry showed that firms in the UK are finding it easier to access credit for the first time in 2009 and expect the situation to improve at a similar pace over the coming three months. Meanwhile, focus would also be on the two-day Federal Reserve Open Market Committee meeting, which kicks off on Tuesday.
The major U.S. averages gained between 1.2%-1.4% on Friday after a Labor Department report showed that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The Labor Department also said that the unemployment rate unexpectedly edged down to 9.4% in July from 9.5%, recording a decrease for the first time since April 2008.
Oil prices turned notably lower on Friday after giving back an early rally amid lingering demand worries. A stronger U.S. dollar also lowered the hedge appeal of commodities. Light sweet crude for September dropped to $70.93 per barrel, down $1.01 per barrel. In Asian trading on Monday, crude oil price retreated further to $70.75 per barrel.
In corporate news, Belgium-based RHJ International, which is vying to buy Vauxhall from GM Europe said it has no plans to close the car firm's two manufacturing plants in Britain and is committed to the Vauxhall brand, reports Sunday Times.
The French media and advertising company Publicis Groupe said that it will acquire digital marketing agency Razorfish from Microsoft in a deal valued at about $530 million in stock and cash.
German software maker SAP is in advanced talks to buy U.S. software firm Tibco Software Inc., reports suggest. A new status conference between the U.S. government and UBS AG to negotiate settlement of a Justice Department lawsuit against UBS will now be held on Aug 12, reports said.
Volkswagen AG's sales chief Detlef Vittig reportedly raised the company's sales outlook for the year after government subsidies helped boost demand for its smaller models.
Switzerland's largest insurer Zurich Financial Services AG said it successfully completed a cash tender offer of $728 million in preferred securities.
Friends Provident Group plc confirmed that it has received a further proposal on behalf of Resolution Limited. The revised proposal is an exchange ratio of 0.9 new Resolution shares for each Friends Provident share, and also includes a partial cash alternative subject to the maximum cash available not exceeding GBP 500 million.
The European markets rose for the second day on Friday after stronger-than-expected U.S. jobs data raised optimism about recovery in the world's largest economy. The FTSEurofirst 300 index of pan-European blue chips closed 1.27% higher, while the narrower DJ Stoxx 50 index rose 1.64%. Around Europe, the U.K.'s FTSE 100 index rose 0.87%, France's CAC 40 index advanced 1.25% and Germany's DAX index added 1.66%.
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