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European Shares Seen Opening Higher After Chinese Data

4/2/2012 2:26 AM ET

European shares are seen opening higher on Monday, as encouraging Chinese manufacturing data eased fears of a hard landing in the world's second-largest economy.

China's official purchasing mangers' index, a gauge of manufacturing sector performance, increased unexpectedly to 53.1 in March, marking the highest reading since March last year, a key survey by the China Federation of Logistics and Purchasing revealed. Economists expected the score to fall to 50.8.

Having said that, the final results of the HSBC/Markit Economics PMI survey paint a pessimistic picture of the country's manufacturing industry, with manufacturing activity deteriorating for a fifth consecutive month. The HSBC PMI fell to 48.3 from 49.6 in February.

Commodities are edging higher, while Asian markets are trading on a mixed note. The Chinese market is shut for a public holiday. The dollar fell against the euro but gained against the yen. The Bank of Japan's closely watched quarterly Tankan survey came in at minus four for the three months to March, as manufacturers continue to remain pessimistic despite recent weakness in the yen.

Closer home, house prices in the United Kingdom rose for the first time in 21 months in March, helped by first time buyers looking to beat the stamp duty holiday that expired on March 24, the latest survey by property tracking website Hometrack revealed. Average asking price for a home in the U.K. rose 0.2 percent from the previous month in March after remaining unchanged in the past two months.

Separately, a survey by the the Lloyds Banking Group Plc showed that confidence among the U.K.'s businesses climbed to its highest level in nine months in March, with the corresponding index climbing to 31 from 1 in February. Lloyds said that the survey suggests growth may have resumed after the economy contracted 0.3 percent during the final three months of 2011.

In corporate news, British financial services provider Royal Bank of Scotland Group Plc is close to selling its Asian equities arm to Malaysia's CIMB Group Holdings Bhd and the deal is expected to be finalized as early as this week, media reports suggest.

Roche announced that it has received the Food and Drug Administration approval for a new pre-analytical instrument that provides an integrated primary tube handling solution for its widely adopted automated molecular testing platform.

Smartrac NV, a Dutch manufacturer of high security RFID inlays, announced the completion of the acquisition of UPM-Kymmene Oyj's RFID business following clearance by all competent authorities.

Bruker Corporation announced that it has acquired all shares of SkyScan N.V., a scientific instruments company located near Antwerp, Belgium for an undisclosed amount.

Barry Callebaut AG, a Swiss manufacturer of cocoa and chocolate products, reported an 18 percent fall in its first-half net profit, weighed down by higher operating expenses as well as financing costs related to the bond placement in summer 2011.

Swiss pharma firm Actelion said two recently concluded studies with the first orally-active CRTH2 antagonist, setipiprant, in asthma and seasonal allergic rhinitis did not confirm efficacy findings made in earlier studies.

French oil and gas giant Total said it is now progressing with actions to stop a gas leak incident on the plugged G4 production well on Elgin platform. Further to the gas leak, the situation has been stable on site over the last five days, the company noted.

European shares halted a 3-day decline on Friday, as stronger-than-forecast U.S. consumer sentiment data and news that EU finance ministers agreed to increase the funds available for future bailouts bolstered sentiment.

The Euro Stoxx 50 index of eurozone bluechip stocks added a percent and the Stoxx Europe 50 index, which includes some major U.K. companies, rose 0.8 percent, while around Europe, the U.K.'s FTSE 100, Switzerland's SMI, the German DAX and France's CAC 40 indexes ended up between half a percent and 1.3 percent.

U.S. stocks turned in a mixed performance on Friday, as traders digested conflicting economic reports on personal income, spending and regional manufacturing. The Dow rose half a percent and the S&P 500 gained 0.4 percent, but the tech-heavy Nasdaq slipped 0.1 percent.

by RTT Staff Writer

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