European stocks are seen opening sharply higher on Friday, mirroring strong Asian cues, higher commodity prices and the soaring euro after European Union President Herman Van Rompuy said that the leaders have agreed to use the continent's permanent bailout fund to recapitalize struggling banks directly once an effective single supervisory mechanism is established.
It was agreed that the European Central Bank will serve as an agent to the European Financial Stability Facility and later to the European Stability Mechanism, when it comes into force, in conducting market operations. The finance chiefs also approved a 120 billion-euro package to promote growth in the debt-stricken eurozone as well as across the broader 27-nation European Union and unveiled short-term measures to help Spain and Italy, which were at the centre of contentious debate in recent times.
In economic releases, British consumer confidence remained unchanged in June, the latest survey by GfK/NOP revealed. The consumer confidence index was unchanged at -29 in June, in line with expectations.
The French economy stagnated in the first quarter of 2012 as previously estimated, final data from the statistical office Insee revealed. The gross domestic product logged no growth after a small 0.1 percent increase in the fourth quarter of 2011.
Meanwhile, retail sales in Germany decreased for a second consecutive month in May, the latest figures from the Federal Statistical Office showed. Sales fell 0.3 percent from a month earlier in real terms in May, following a 0.2 percent decline in the previous month. The May outcome was against expectations for an increase of 0.2 percent.
In corporate news, Corin Group Plc said it has reached an agreement with LARS SA, the manufacturer of the LARS ligament products which Corin distributes in the U.K. and Australia, to extend this distribution agreement by three years until December 2016.
America Movil S.A.B. De C.V. said that it would hold 393.28 million shares in Koninklijke KPN NV, representing a stake of 27.7 percent in the Dutch telecom firm, as the acceptance period for shares ended and the offer became unconditional.
Manufacturing buy-out specialist Melrose Plc's wholly-owned unit said it would acquire all outstanding American Depositary Shares of German engineering firm Elster Group SE for $20.50 per ADS cash and all shares for $82.00 per share in cash, representing an aggregate value for all outstanding ADSs and shares of around $2.3 billion.
European stocks fell on Thursday after data showed that German unemployment increased more than expected and eurozone economic confidence deteriorated to a 32-month low in June. Banks bore the brunt of the selling after U.K. lender Barclays agreed to pay $453 million to U.S. and British authorities to settle allegations that it manipulated key interest rates. The German DAX fell 1.3 percent, France's CAC 40 slid 0.4 percent, the U.K.'s FTSE 100 shed 0.6 percent and Switzerland's SMI eased 0.2 percent.
U.S. stocks saw significant weakness before ending modestly lower overnight, as investors reacted negatively to the Supreme Court's decision to uphold President Obama's healthcare reform law, including the law's individual insurance mandate.
Lingering concerns about the financial situation in Europe also weighed on markets as EU leaders gathered for a two-day summit to find a solution to prevent the debt crisis from escalating. The tech-heavy Nasdaq underperformed its counterparts, ending the session down 0.9 percent, while the Dow and the S&P 500 slid about 0.2 percent each.
by RTT Staff Writer
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