IFO, Pearson, EADS Propel Eurostocks
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IFO, Pearson, EADS Propel Eurostocks
Reuters
IFO, Pearson, EADS Propel Eurostocks
Monday July 28, 5:54 am ET
By Alison Tudor
LONDON (Reuters) - European stocks climbed on Monday morning as Germany's Ifo business climate index fueled hopes of recovery there while UK media giant Pearson and European defense group EADS posted pleasing results.
However, United Utilities fell after the British water and power firm unveiled a bumper rights issue.
Germany's Ifo business climate index rose for the third consecutive month, which is regarded as a signal of a possible economic upturn.
"The most important aspect of the survey is that it rose for the third straight month which was a positive signal even if the index came in slightly below expectations," said Ken Wattret, chief Euroland economist at BNP Paribas.
"It is slightly worrying that expectations for an improvement in future business conditions rose while consideration of the current business environment was less favorable. There is a danger that the pick up does not happen."
By 0825 GMT, the FTSE Eurotop 300 index was up 1.53 percent at 874 points, while the DJ Euro Stoxx 50 index gained 1.9 percent to 2,489 points.
Volume on the benchmark FTSE Eurotop 300 index was 493 billion euros and advancers outnumbered decliners by a healthy ratio of 7.5 to one.
Around Europe, Britain's FTSE 100 index was 1.01 percent higher, Germany's DAX was 1.77 percent up, France's CAC 40 was 2.2 percent stronger.
The Swiss SMI was 1.4 percent firmer at 5,019, marginally below its 2003 peak of 5,032 struck earlier.
U.S. stock futures suggested Wall Street would extend Friday's gains at the open. Volatile insurance stocks such as Germany's Munich Re and France's AXA as well as technology stocks like Nokia rose on improved prospects for trading in New York.
With many investors away on their summer holidays volumes are expected to be subdued, but strategists are beginning to get glimpses of how markets will trade when they return in force.
"Sectoral shifts now underway offer some clues about how investors are repositioning themselves for a post-summer upturn. In Europe and the U.S. we see growing evidence of a call on cyclical recovery. Our sector strategy is aligned with these trends, with greater cyclical exposure," said Anais Faraj, a strategist at Nomura.
EADS, PEARSON GAIN
EADS was five percent higher after the Airbus parent company surprised investors with a smaller than expected drop in first-half operating profits, in a results statement released by accident three days early.
Pearson was 3.3 percent higher after the British publisher slipped into a slim first-half pre-tax loss from profit a year ago due to delayed textbook sales and lower advertising at the Financial Times.
The normalized pre-tax loss of one million pounds, excluding goodwill amortization and other items, was at the upper end of analysts' expectations, which ranged from a loss of 42 million pounds to a profit of 4 million pounds.
Renault was 1.4 percent lower after bankers said they would place 24.2 million shares in the French carmaker representing 8.5 percent of the firm's share capital, on behalf of the French state.
United Utilities was six percent weaker after the British water and power firm said it would seek to raise one billion pounds to fund further growth in the biggest UK rights issue so far this year.
IFO, Pearson, EADS Propel Eurostocks
Monday July 28, 5:54 am ET
By Alison Tudor
LONDON (Reuters) - European stocks climbed on Monday morning as Germany's Ifo business climate index fueled hopes of recovery there while UK media giant Pearson and European defense group EADS posted pleasing results.
However, United Utilities fell after the British water and power firm unveiled a bumper rights issue.
Germany's Ifo business climate index rose for the third consecutive month, which is regarded as a signal of a possible economic upturn.
"The most important aspect of the survey is that it rose for the third straight month which was a positive signal even if the index came in slightly below expectations," said Ken Wattret, chief Euroland economist at BNP Paribas.
"It is slightly worrying that expectations for an improvement in future business conditions rose while consideration of the current business environment was less favorable. There is a danger that the pick up does not happen."
By 0825 GMT, the FTSE Eurotop 300 index was up 1.53 percent at 874 points, while the DJ Euro Stoxx 50 index gained 1.9 percent to 2,489 points.
Volume on the benchmark FTSE Eurotop 300 index was 493 billion euros and advancers outnumbered decliners by a healthy ratio of 7.5 to one.
Around Europe, Britain's FTSE 100 index was 1.01 percent higher, Germany's DAX was 1.77 percent up, France's CAC 40 was 2.2 percent stronger.
The Swiss SMI was 1.4 percent firmer at 5,019, marginally below its 2003 peak of 5,032 struck earlier.
U.S. stock futures suggested Wall Street would extend Friday's gains at the open. Volatile insurance stocks such as Germany's Munich Re and France's AXA as well as technology stocks like Nokia rose on improved prospects for trading in New York.
With many investors away on their summer holidays volumes are expected to be subdued, but strategists are beginning to get glimpses of how markets will trade when they return in force.
"Sectoral shifts now underway offer some clues about how investors are repositioning themselves for a post-summer upturn. In Europe and the U.S. we see growing evidence of a call on cyclical recovery. Our sector strategy is aligned with these trends, with greater cyclical exposure," said Anais Faraj, a strategist at Nomura.
EADS, PEARSON GAIN
EADS was five percent higher after the Airbus parent company surprised investors with a smaller than expected drop in first-half operating profits, in a results statement released by accident three days early.
Pearson was 3.3 percent higher after the British publisher slipped into a slim first-half pre-tax loss from profit a year ago due to delayed textbook sales and lower advertising at the Financial Times.
The normalized pre-tax loss of one million pounds, excluding goodwill amortization and other items, was at the upper end of analysts' expectations, which ranged from a loss of 42 million pounds to a profit of 4 million pounds.
Renault was 1.4 percent lower after bankers said they would place 24.2 million shares in the French carmaker representing 8.5 percent of the firm's share capital, on behalf of the French state.
United Utilities was six percent weaker after the British water and power firm said it would seek to raise one billion pounds to fund further growth in the biggest UK rights issue so far this year.
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