European stocks may rise on Thursday, extending the previous session's rally, as strong corporate earnings from U.S. bellwethers such as IBM and eBay allayed concerns about a slowdown in profit growth. Also, hope for further stimulus from the Federal Reserve stays alive after Chairman Bernanke on Wednesday reiterated the central bank's stance to do what is necessary to bolster growth if conditions don't improve.
Meanwhile, the crisis in the euro area has reached a "critical stage" with the financial markets in parts of the region remaining under acute stress despite major policy actions, the International Monetary Fund said in a review of euro area policies.
The Fund noted that the European Central bank can provide further stimulus, including interest rate reductions, quantitative easing, more SMP purchases and another round of liquidity provision to contain the escalation of the crisis. The IMF also called for determined action towards establishing banking and fiscal unions in the euro area to bolster monetary union.
Asian markets are posting broad-based gains, as a slew of upbeat corporate earnings and signs that the U.S. housing market is back on track bolstered investor sentiment.
Oil prices are trading firm near a seven-week high due to heightened tensions in the Middle East, copper is holding steady and the euro is gaining ground after overnight weakness as investors await Spanish and French bond auctions due later in the day.
In corporate news, British energy giant BP Plc announced that it is moving on to the next stage in the process, required under the shareholder agreement, for the potential sale of its shareholding in TNK-BP, the largest oil company in Russia.
Traders at Deutsche Bank AG, Credit Agricole SA, Societe Generale SA and HSBC Holdings Plc are under investigation for possible interest rate manipulation that saw Barclays being fined 290 million pounds last month, reports suggest.
Akzo Nobel NV posted second-quarter net income from continuing operations of 197 million euros, lower than 251 million euros reported a year ago, mainly hurt by higher incidental charges.
Swedish telecom operator Tele2 AB posted lower second-quarter net profit attributable to equity holders of the parent company of 850 million Swedish kroner compared with 1.11 billion Swedish kroner a year ago.
Veolia Environnement SA said that its wholly-owned subsidiary, Veolia Environmental Services North America, has agreed to sell its U.S. solid waste activities to Star Atlantic Waste Holdings LP for a total transaction value of $1.909 billion.
ADVA Optical Networking, a German provider of intelligent telecommunications infrastructure solutions, reported a significant increase in profit for the second quarter on the back of foreign currency exchange gains.
European stocks rebounded from the previous session's sluggish performance on Wednesday, with a surprise fall in the overall U.K. unemployment and gains on Wall Street amid well-received corporate earnings underpinning sentiment.
The Euro Stoxx 50 index of eurozone bluechip stocks rose 1.5 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.1 percent, while around Europe, the FTSE 100 of the U.K., Switzerland's SMI, the German DAX and France's CAC 40 gained between 1 percent and 1.8 percent.
U.S. stocks posted notable gains overnight, as tech stocks rallied despite disappointing guidance from semiconductor giant Intel. Buying interest was also generated by a report released by the Commerce Department which showed a bigger than expected rebound in housing starts in June.
Building permits data, an indicator of future housing demand, fell by 3.7 percent to an annual rate of 755,000 in June, while the Fed's Beige Book revealed modest expansion in overall economic activity in June and early July. The Dow rose 0.8 percent, the tech-heavy Nasdaq climbed 1.1 percent and the S&P 500 gained 0.7 percent.
by RTT Staff Writer
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