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European stocks rise on Fed easing hopes; DAX up 0.47%

Published 08/23/2012, 03:52 AM
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Investing.com - European stocks were higher on Thursday, as the Federal Reserve signaled the possibility for fresh easing measures in the near future to shore up growth, while investors eyed key manufacturing data from the euro zone after a relatively positive German report.

During European morning trade, the EURO STOXX 50 climbed 0.64%, France’s CAC 40 advanced 0.58%, while Germany’s DAX 30 rose 0.47%.

Stocks rallied after the minutes of the Fed’s August policy meeting showed that officials remain supportive of more stimulus measures unless the economy shows signs of expansion.

Sentiment also found some support after data showed that manufacturing activity in Germany in August improved for the first time since January, although it remained in contraction territory for the sixth consecutive month.

Market research group Markit said that its preliminary German manufacturing purchasing managers’ index rose to a seasonally adjusted 45.1 in August from a final reading of 43.0 in July.

Analysts had expected the index to ease up to 43.4 in August. 

Meanwhile, talks between Greece and its lenders seemed likely to continue well into next month, after German Chancellor Angela Merkel said on Wednesday she and Greek Prime Minister Antonis Samaras will not make any decisions during their talks on Friday.

Financial stocks were sharply higher, led by Italian lender Intesa Sanpaolo, up 2.65%, and closely followed by Unicredit, whose shares advanced 2.44%.

French lenders Societe Generale and BNP Paribas also contributed to gains, with shares surging 2.73% and 2.31% respectively, while Germany’s Deutsche bank and Commerzbank rallied 2.10% and 1.18%.

Elsewhere, Air France-KLM climbed 1.17% after rival Qantas Airways posted its first annual loss in at least 17 years.

On the downside, Ahold, the Dutch owner of Stop & Shop grocery stores, plunged 3.55%, as the company reported lower-than-expected second quarter earnings.

In London, commodity-heavy FTSE 100 rose 0.37%, led by sharp gains in mining stocks.

Rangold Resource led gains, with shares soaring 3.91%, while BHP Billiton and Rio Tinto advanced 1.44% and 1.23%.

Oil and gas major Anglo American was also on the upside, with shares rallying 1.22%, as the company was reportedly set to announce later Thursday an agreement to end a 10-month dispute with Chile’s Codelco over the world’s fifth-largest copper mine.

Meanwhile, Quantas’ poor results also boosted U.K. airline companies, such as IAG, the owner of British Airways, whose shares surged 3.44% following the news.

In the financial sector, U.K. lenders tracked their European counterparts sharply higher. Shares in Barclays jumped 1.61% and Lloyds Banking advanced 1.42%, while HSBC Holdings and the Royal Bank of Scotland rose 0.59% and 0.23%.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.31% rise, S&P 500 futures signaled a 0.31% increase, while the Nasdaq 100 futures indicated a 0.33% gain.

Also Thursday, Markit said that its preliminary French manufacturing purchasing managers’ index rose to a seasonally adjusted 46.2 in August from a final reading of 43.4 in July.

Analysts had expected the index to ease up to 43.6 in August. 

Later in the day, the euro zone was to produce preliminary data on manufacturing and service sector growth.

The U.S. was to release its weekly government report on initial jobless claims, followed by preliminary data on manufacturing activity and official data on new home sales.


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