LONDON: European markets were firmer on Tuesday after an extended weekend break, bucking fears of slowing demand from China and despite debt stand-off fears depressing Greek stocks.
The pan-European FTSEurofirst 300 equity index rose 0.3 percent, with UBS shares gaining almost 7 percent after the bank reported its highest quarterly profit in nearly five years and said it was in advanced U.S. talks to settle allegations of foreign exchange market rigging.
U.S. stock index futures were lower ahead of another round of earnings reports and after data showed the U.S. trade deficit surged to its highest level in nearly 6-1/2 years in March as imports rebounded strongly after being held down by a labour dispute at key West Coast ports.
The European Commission sent positive signals on the economy, saying euro zone economic growth would be stronger than previously expected this year thanks to cheaper oil, a weaker euro, stable global growth and supportive fiscal and monetary policies.
Britain's FTSE 100 index was up 0.5 percent after a three-day weekend while Germany's DAX fell 0.4 percent. A fresh raft of earnings updates led to mixed trading, with Infineon up after the chip-maker lifted its annual outlook forecasts while airline Lufthansa reined in profit expectations.
Sterling hit a ten-day low against the dollar on Tuesday after data showed growth in Britain's construction industry slowed sharply in April, just two days before a national election that looks unlikely to hand any party an overall majority.
Greece's debt stand-off with international creditors sent the ATG benchmark index down 4 percent. Athens stepped up diplomacy with euro zone partners to try to avert a potentially catastrophic funding crunch this month, when it must make a big debt repayment to the IMF as cash reserves dry up.
Fears of an imminent crisis pushed up low-rated euro zone bond yields and the euro eased a little against the U.S. dollar.
"We really do think time is running out over Greece. Everything has pointed to this being the week in which a deal needs to be done," Charles Stanley market analyst Jeremy Batstone-Carr said.
"Greece is having huge difficulties making payments to the IMF, and the IMF is in no mood to soften its stance."
Data from China, Taiwan and Japan showed factory activity contracting, while Australia's central bank cut interest rates for the second time in four months as the region's growth falters in the face of slowing Chinese demand.
The Shanghai Composite Index fell more than 4 percent, fuelled by media reports of tougher margin requirements by some brokerages. That added to concerns about market liquidity ahead of new share listings.
While some questioned the effectiveness of additional central-bank easing, London nickel hit a five-week high and copper held near a four-month peak as traders digested the prospect of further monetary stimulus.
"Whilst China certainly needs to loosen monetary policy further, it is by no means set to conduct QE (bond-buying) or other unconventional measures," Jefferies' global equity strategist Sean Darby said.
In commodities, Brent crude oil futures slipped towards $66 a barrel, falling from a 2015 high, as Saudi Arabia considered halting bombing in Yemen to allow the delivery of aid, which eased concerns about oil supply from the Middle East.
A stronger U.S. dollar also weighed on the dollar-denominated commodity, while investors waited for data on U.S. commercial crude inventories later this week for more direction.
Comments
Comments are closed for this article.