European stocks are seen opening higher on Monday, mirroring firm Asian cues after data showed business conditions are improving in Japan. Having said that, tepid Chinese manufacturing data and a contraction in South Korea's manufacturing sector for the first time in five months in June suggest that there are still plenty of risks to Asian economies from Europe's debt crisis.
The Chinese manufacturing sector remained in contraction for an eighth consecutive month in June, as output, incoming new orders and employment continued to decrease, the final results of a survey by Markit Economics and HSBC showed today. The purchasing managers' index that measures the performance of the manufacturing sector fell to 48.2 in June from 48.4 in May.
The purchasing managers' index released Sunday by the China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics showed that its purchasing managers' index for the manufacturing sector fell to a 7-month low of 50.2 in June from 50.4 in May.
Closer home, French economic growth will be weaker than estimated earlier in 2012 and 2013, Finance Minister Pierre Moscovici indicated in an interview. Moscovici said the economic growth may reach around 0.4 percent in 2012, slightly weaker than 0.5 percent predicted earlier. In 2013, an expansion within 1 to 1.3 percent appears "more credible," he told Figaro newspaper.
In economic releases, house prices in the U.K. stagnated in June as global economic gloom curtailed demand, the latest survey by Hometrack showed. While prices remained unchanged compared to the previous month, the number of first time home buyers fell 0.5 percent, marking the first drop in five months. Property supply, however, increased 1.5 percent month-over month.
In corporate news, Spanish lender Bankia said that it plans to reduce the Group's unproductive assets by 50 percent over a three-year period.
Wizcom Technologies, a maker of portable hand-held scanning translators, said that the Court of Petach Tikva in Israel has approved the application of the nominated administrator of the company to sell all the assets of Wizcom Technologies.
French media and telecoms giant Vivendi SA has decided to seek a buyer for its $8.1 billion stake in Activision Blizzard Inc., the Bloomberg reported, citing an unidentified person with knowledge of the situation.
GlaxoSmithKline Plc once again extended its $2.6 billion hostile offer for shares of Rockville-based Human Genome Sciences Inc. to July 20.
German industrial gases producer Linde AG announced that it has agreed to buy U.S.-based Lincare Holdings Inc for a total transaction volume of about $4.6 billion.
Marcus Agius, the chairman of British lender Barclays Plc., is set to resign today after the bank was fined 290 million pounds last week for attempting to manipulate the inter-bank lending rate, media reports suggest. The UK government has ordered an independent review into the inter-bank lending rate after Barclays Plc was fined for market speculation.
European stocks posted their biggest one-day gain in months on Friday, as investors cheered a plan to stimulate the region's economy and prop up under-capitalized banks. The Euro Stoxx 50 index of bluechip stocks jumped 5 percent and the Stoxx Europe 50 gained 2 percent, while key benchmark indexes in Switzerland, the U.K., Germany and France rose between 1.3 percent and 4.8 percent.
U.S. stocks rallied on Friday after EU Leaders agreed to make use of Eurozone's bailout funds to recapitalize the region's banks directly once an effective single supervisory mechanism is established, relieving the governments of the burden of bailing out troubled lenders.
Traders, meanwhile, largely shrugged off a mixed batch of U.S. economic data, including a report from Thomson Reuters and the University of Michigan showing that consumer sentiment deteriorated by more than previously estimated in the month of June. The Dow jumped 2.2 percent, the tech-heavy Nasdaq soared 3 percent and the S&P 500 surged up 2.5 percent.
by RTT Staff Writer
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