The European markets rebounded from yesterday's sharp sell-off on Thursday and finished in positive territory. Banks and energy stocks were among the best performers of the session. The markets managed to shrug off several weaker than expected European economic reports, as well as the decline in Chinese manufacturing activity. Wednesday's EU summit resulted in the clear message that their leaders want Greece to remain in the euro area.
European leaders have voiced their strong desire for Greece to remain in the eurozone and honor its commitments under previously agreed bailout deals that require the implementation of reforms and unpopular austerity measures, European Council President Herman Van Rompuy said during a press conference held after an informal summit of European leaders in Brussels on Wednesday.
Rompuy also expressed hopes that the new Greek government that emerges from next month's general elections would choose to implement the reforms and austerity measures needed to bring the crisis-hit nation back on the road to progress.
German Chancellor Angela Merkel reinforced her opposition to the idea of issuing eurobonds at Wednesday's informal European Union summit. Merkel added that eurobonds will violate the EU treaty and would not help to kick-start growth. Meanwhile, new French President Francois Hollande insisted that the option should be actively considered.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.16 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.42 percent.
The CAC 40 of France climbed by 1.16 percent and the DAX of Germany gained 0.48 percent. The FTSE 100 of the U.K. rose by 1.59 percent and the SMI of Switzerland finished up by 0.59 percent.
In Frankfurt, RWE closed higher by 2.20 percent. Commerzbank upgraded its rating on RWE to "Hold" from "Reduce" and increased its price target on the stock.
Bayer decreased by 0.77 percent, after an FDA panel voted against a new use for the company's oral blood thinner, Xarelto.
Commerzbank finished unchanged and Deutsche Bank rose by 0.83 percent.
Kontron finished down by 4.80 percent. Equinet upgraded the stock to "Buy" from "Accumulate."
In Paris, Societe Generale gained 2.29 percent. BNP Paribas climbed by 1.64 percent and Credit Agricole increased by 1.48 percent.
GDF Suez rose by 2.24 percent, after Credit Suisse upgraded its rating on the stock to "Neutral" from "Underperform."
Shares of Total SA added 1.46 percent.
In London, SAB Miller declined by 0.23 percent. The beverage company reported a sharp rise in its annual profit.
Cable & Wireless Communications surged by 17.64 percent, after the company reported annual results.
BP increased by 3.33 percent and Royal Dutch Shell gained 2.16 percent.
Barclays rose by 3.07 percent and Standard Chartered advanced by 1.94 percent. Royal Bank of Scotland climbed by 1.90 percent. Lloyds Banking Group increased by 1.49 percent and HSBC gained 1.44 percent.
Mothercare jumped by 23.56 percent, after the company detailed its three-year growth plan.
Thomas Cook climbed by 16.44 percent, after appointing a new chief executive.
Final data from the Federal Statistical Office on Thursday confirmed that the German economy has staged an impressive comeback in terms of economic growth in the first quarter of 2012, supported by exports and private consumption. As estimated earlier, the gross domestic product rose a seasonally adjusted 0.5 percent quarter-on-quarter, recovering from a 0.2 percent decline in the fourth quarter.
The U.K. economy fell into a double-dip recession at a faster than estimated pace during the first quarter due to a sharp revision to construction. Gross domestic product shrank 0.3 percent from a quarter ago, slightly bigger than the previously estimated drop of 0.2 percent, second estimates published by the Office for National Statistics revealed Thursday.
Eurozone private sector activity downturn worsened to a three-year low in May after the economy narrowly escaped a recession in the first quarter, preliminary data from Markit Economics revealed Thursday. The growth-engine of the 17-nation bloc Germany also returned to a negative zone. Intensifying the downturn, France's private sector shrank at the fastest since April 2009. In the rest of the Eurozone, the pace of contraction remained severe. The flash composite output index dropped more than expected to 45.9 from 46.7 in April.
Activity in the German manufacturing sector decreased at a faster rate in May, data from a survey by Markit Economics and BME showed Thursday. The seasonally adjusted purchasing managers' index for the manufacturing sector dropped to 45 in May from 46.2 in April. Economists were looking for a reading of 47 in May.
Activity in the French manufacturing sector decreased at a significantly faster rate in May, data from a survey by Markit economics and CDAF showed Thursday. The seasonally adjusted purchasing managers' index for the manufacturing sector dropped to a 36-month low of 44.4 in May from 46.9 in April. Economists were looking for a reading of 47.
French business confidence came in worse than expected in May, survey data released by the statistical office INSEE revealed Thursday. The business confidence indicator for the manufacturing industry dropped to 93 from April's 95. Economists had forecast a score of 94.
Confidence among German businesses fell more than expected in May to the lowest level in six months, as talks about a possible Greek exit from Eurozone weighed on firms' optimism, a key survey revealed Thursday. The Ifo Institute said that its business climate index fell to 106.9 in May from 109.9 in April. This was the first drop in the index since October last year. Economists had forecast a more modest drop to 109.4.
China's manufacturing activity contracted at a faster pace in May, preliminary survey results from Markit Economics showed Thursday. The flash purchasing managers' index for the manufacturing sector fell to 48.7 in May from 49.3 in April.
Initial claims for U.S. unemployment insurance dipped in the week ended May 19th after revised figures showed a higher number of claims in the previous week. According to the Labor Department, new unemployment claims came in at a seasonally adjusted level of 370,000, a slight decline from the previous week's revised level of 372,000.
The data for the previous week had initially shown new unemployment claims holding level at 370,000, so the revision reflects a slight increase. Nevertheless, the number for the latest week still comes in below the expectations of most economists, who had predicted a slight increase in claims to 371,000.
After reporting a sharp drop in durable goods orders in the month of March, the Commerce Department released a report on Thursday showing a modest increase in durable goods orders in April. The report showed that durable goods orders edged up by 0.2 percent in April after tumbling by 3.7 percent in March. The steep drop reported for March reflected a revision from the 4.2 percent decrease that had been reported previously.
by RTT Staff Writer
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