European Stocks Seen Higher On US Optimism European stocks may open higher on Monday on signs the U.S. economy is on track for solid growth. However, trading volumes are likely to remain thin amid a holiday in the U.S. for the Martin Luther King Jr. holiday. The Asian markets followed Wall Street higher, although Chinese and Hong Kong shares dropped amid concerns the recent rally was overdone. Chinas Shanghai Composite is tumbling 7.8 percent, dragged down by brokerages, after Chinas securities regulator took measures to rein in margin trading at certain brokerage companies. Hong Kongs Hang Seng index is losing 2 percent in tandem with the slide in Chinese stocks. The Japanese yen gained against all of its major counterparts as the selloff in Chinese stocks spurred demand for safe-haven assets. After Sundays gloomy home price data, investors await a slew of Chinese data on GDP, retail sales, industrial production and fixed asset investment, due to be released Tuesday for any signs of further weakness. Closer home, property tracking website Rightmove has reported that asking prices for U.K. homes rose 1.4 percent from the previous month in January, snapping two months of declines. On a yearly basis, house prices jumped 8.2 percent after a 7.0 percent spike in the previous month. Eurozones current account and construction output data are among the few economic releases scheduled for today. European Unions foreign ministers are expected to hold a meeting in Brussels at 3:30 am ET, with discussion likely to focus on a European Union response to the growing terror threat of jihadist attacks. The main event of the week will be Thursdays meeting of the European Central Bank, with many economists expecting the central bank to roll out a government bond-buying program, as negative inflation figures reported for December provide scope for monetary policy maneuvering. Greece will have its parliamentary election on 25th, with the left-wing radical left wing Syriza party appears set to take power. Across the Atlantic, traders await reports on homebuilder confidence, housing starts and existing home sales this week for cues on the interest-rate outlook. On the earnings front, American Express, General Electric, IBM, Johnson & Johnson, McDonalds, Morgan Stanley and United Continental are among the prominent companies that will unveil their quarterly results this week. In domestic corporate news, Hutchison Whampoa, controlled by Hong Kong billionaire Li Ka-shing, is in early discussions with Telefonica to buy its O2, the Sunday Times reported, citing unnamed sources. German telecom giant Deutsche Telekom AG plans to increase spending on networks in its home market of Germany to ward off rivals including Vodafone Group Plc. and Spanish telecom group Telefónica S.A., the Bloomberg reported. Evolva Holding SA said it has signed an agreement with Cargill to co-develop a sustainable, customizable, and cost-effective fermentation production process for a second family of high-value food and beverage ingredients. The European markets closed firmly in positive territory on Friday, extending their previous sessions gains, after a ruling by the European Court of Justice paved the way for the ECB to join other leading central banks in conducting monetary stimulus to combat deflation in the euro zone and safeguard against a possible Greek exit. The German DAX soared 1.4 percent, Frances CAC 40 advanced 1.3 percent and the FTSE 100 of the U.K. added 0.8 percent. On Wall Street, the major averages snapped a five-session losing streak on Friday as the price of crude oil swung higher and investors digested a slew of mixed data showing a modest pullback in industrial production, a surge in consumer confidence and weakening core inflation. Traders grew more optimistic that a benign inflationary and commodity environment will make the case for delaying the 1st interest rate increase from the Federal Reserve. The Dow rallied 1.1 percent, the tech-heavy Nasdaq jumped 1.4 percent and the S&P 500 climbed 1.3 percent.
Posted on: Mon, 19 Jan 2015 07:03:28 +0000
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