The European markets finished in positive territory again on Tuesday. Subdued Eurozone inflation figures fueled hopes for an interest rate cut by the European Central Bank in the upcoming meeting on Thursday. The Bank of England is also expected to announce its decision on interest rates on Thursday. The stronger than expected U.S. Factory orders result was also viewed positively by investors. Trading volume was slightly weaker today and is likely to decrease further on Wednesday, due to the U.S. Independence Day Holiday.
Confidence among British business firms remained still lower than levels seen before the recession in 2007 constrained by weak domestic demand, the British Chambers of Commerce (BCC) said Tuesday in its latest Quarterly Economic Survey.
"While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe," BCC Director-General John Longworth said. "Growth cannot wait. The government must take an imaginative and brave approach to stimulating the economy and helping businesses thrive," he added.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.89 percent.
The DAX of Germany climbed by 1.26 percent and the CAC 40 of France gained 0.96 percent. The FTSE 100 of the U.K. finished higher by 0.84 percent and the SMI of Switzerland rose by 1.39 percent.
In Frankfurt, Deutsche Bank increased by 1.83 percent, but Commerzbank lost 0.29 percent.
Kepler upgraded its rating on shares of Linde to "Buy" from "Hold." The stock finished higher by 1.20 percent.
Axel Springer ended the session higher by 4.10 percent. Berenberg upgraded the stock to "Buy" from "Hold."
In Paris, Peugeot climbed by 3.65 percent. The car maker is said to be planning to cut as much as 10 percent of its French workforce this year, higher than its earlier announcement. Renault gained 3.75 percent.
Nomura initiated Schneider Electric with a "Neutral" rating. The stock closed up by 1.88 percent.
Societe Generale finished lower by 1.50 percent, but Credit Agricole gained 1.05 percent.
In London, Barclays declined by 0.80 percent. Bob Diamond resigned as its CEO, following the rate-setting scandal. Deutsche Bank downgraded Barclays to "Hold" from "Buy."
Tensions with Iran fueled an increase in the price of oil again on Tuesday. Tullow Oil climbed by 2.55 percent and Royal Dutch Shell gained 1.34 percent. BG Group also added 1.81 percent.
Eurozone producer price inflation eased to the lowest level in more than two years in May, as inflationary pressures continue to recede amid sluggish economic performance, the latest data from the Eurostat showed Tuesday.
The producer price inflation in the domestic market eased to 2.3 percent in May from 2.6 percent in April. This is the weakest rate since March 2010. Economists had forecast inflation to fall to 2.5 percent. The Eurozone producer price index fell 0.5 percent, following a 0.1 percent gain in the preceding month.
British construction output declined at the sharpest pace in two-an-a-half years in June, a survey by Markit Economics found Tuesday. The Markit/CIPS Construction Purchasing Managers' Index fell to 48.2 in June from 54.4 in May.
U.S factory orders posted a stronger than expected rebound in May, buoyed by orders for ships, boats and aircraft, according to figures released Tuesday by the Commerce Department. New orders for manufactured goods at came in at $469.0 billion, a 0.7 percent increase that partially reverses two consecutive months of declines.
Although the April level of factory orders was revised down to show a 0.7 percent decline compared to the 0.6 percent decrease initially reported, the May increase comes in significantly strong than the 0.1 percent growth predicted by most economists.
by RTT Staff Writer
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