European stocks are poised to edge higher on Wednesday, mirroring gains on Wall Street overnight and in Asia this morning, although concerns about contagion risks from eurozone countries like Greece and Spain persist.
The European Central Bank yesterday called for a deposit guarantee scheme to make the euro area more resilient and data on Japan's core machinery orders beat estimates, perking up investor sentiment to some extent.
The euro is holding steady against the dollar and the yen in Asian trading as investors remain focused on the upcoming Italian debt auctions today as well as tomorrow and the Greek vote on 17th.
Meanwhile, the World Bank has urged developing nations to prepare for a long period of volatility in the global economy amid a resurgence of tensions in high-income Europe. "Increased uncertainty will add to pre-existing headwinds from budget cutting, banking-sector deleveraging and developing country capacity constraints," the lender said in the newly released Global Economic Prospects.
In economic releases, inflation in France eased again in May, the latest figures from the statistical office Insee showed. Inflation, as measured by the harmonized index of consumer prices, slowed to 2.3 percent in May from 2.4 percent in April. On a monthly basis, the headline inflation fell 0.1 percent, matching economists' expectations.
Industrial production from the euro area and final inflation data from Germany are the other major statistical reports due in the European session.
In domestic corporate news, AIG Century GmbH & Co. KGaA, a company indirectly owned by insurer American International Group Inc., said it has launched a voluntary public tender offer for all shares of AIRE GmbH & Co. KGaA, a real estate investment company.
Cision AB announced a settlement with the U.S. publisher Dow Jones & Co. that restricts the company from redistributing Dow Jones original content.
German gas- and electric-meter company Elster Group SE has been put up for sale by private equity firm CVC Capital Partners, the Wall Street Journal reported, citing people familiar with the matter.
RS Components, the trading brand of Electrocomponents Plc, has entered into a formal reseller agreement with Micrel Inc., a global manufacturer of integrated circuits, for analogue, Ethernet and high bandwidth applications.
Kewill Plc and kestrel bidco announced that they have reached an agreement on the terms of a recommended cash offer under which kestrel Bidco will acquire the entire issued and to be issued ordinary share capital of Kewill.
Dutch bank ING Bank NV said it agreed to pay $619 million to settle charges concerning an investigation into compliance with U.S. economic sanctions and U.S. dollar payment practices until 2007.
European stocks closed to the upside in choppy trading on Tuesday, with defensives such as food and beverage stocks in demand, as investors believed that the Spanish bank bailout won't offer a long-term solution to Europe's debt crisis.
The Euro Stoxx 50 index of eurozone bluechip stocks rose 0.3 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, gained 1.1 percent, while around Europe, France's CAC 40, the DAX of Germany, the U.K.'s FTSE 100 and Switzerland's SMI rose between 0.1 percent and 0.8 percent.
On Wall Street, stocks ended notably higher overnight after Spanish bond yields came off euro-era record highs. Bargain hunting following the previous session's sell-off also contributed to the buying interest. The Dow rose 1.3 percent, while the tech-heavy Nasdaq and the S&P 500 added about 1.2 percent each.
by RTT Staff Writer
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