European stocks may rise on Monday, extending Friday's steep gains, after German Chancellor Angela Merkel and Italian Prime Minister Mario Monti vowed to defend the euro amid escalating tensions in eurozone.
During a telephone conversation on Sunday, both Merkel and Monti agreed to do everything possible to protect the euro area and stated that the decisions made at the EU summit last month must be implemented as quickly as possible. According to reports, Monti accepted Merkel's invitation to travel to Berlin in the second half of August. The statements from the leaders follow a similar assurance from European Central Bank President Mario Draghi on Thursday.
Asian markets are trading mostly higher as the assurances from the top leaders raised hopes of more EU actions to ease the ongoing debt crisis. However, the euro weakened against the dollar following gains last week.
In economic releases, home prices in the U.K. declined for the first time this year in July as the deepening recession and eurozone debt worries curbed demand for properties, a survey by Hometrack revealed. House prices slipped 0.1 percent month-over-month in July, while the number of properties coming to the market was 1.4 percent higher than a month earlier. London was the only region to report an increase in house prices, though the rate of inflation eased to 0.1 percent.
In corporate news, British insurer Aviva Plc has received unsolicited bids from several financial and private equity groups for its U.S. life division known as Aviva USA worth about 1 billion pounds, the Sunday Telegraph reported.
BMW India, the Indian arm of German luxury car maker, said that it would introduce four models in India during the second half of this calender year to retain its top position in the premium car segment.
Markets regulator Bafin has extended its scrutiny of German banks by investigating more lenders following a global interest rate rigging scandal, Reuters reported, citing sources.
Swiss pharmaceutical firm Novartis' drug Afinitor has been approved by European Commission to treat patients with the most common form of advanced breast cancer, reports suggest.
France-KLM's second-quarter net loss, group share widened significantly to 895 million euros or 3.02 euros per share from 197 million euros or 0.67 euros per share loss a year before.
Air Liquide reported a 5.3 percent rise in its first-half net profit to 790 million euros , with group revenue rising 5.9 percent on a reported basis from the prior-year period.
European stocks rose sharply on Friday driven primarily by word from European Central Bank President Mario Draghi that the central bank stands ready to take whatever measures needed to preserve the euro. The Euro Stoxx 50 index of eurozone bluechip stocks rose 2.2 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, gained 1.3 percent, while around Europe, the U.K.'s FTSE 100, Switzerland's SMI, France's CAC 40 and the German DAX rose between 1 percent and 2.3 percent.
U.S. stocks rallied on Friday, adding to the strong gains posted in the previous session, as investors reacted positively to some relatively upbeat U.S. GDP data as well as the latest news out of Europe. The Dow rose 1.5 percent, the tech-heavy Nasdaq rallied 2.2 percent and the S&P 500 advanced 1.9 percent.
The release of a report from the Commerce Department showed that the pace of U.S. economic growth increased by 1.5 percent in the second quarter compared to an upwardly revised 2.0 increase in the first quarter. While the report points to continued economic growth, analysts noted that the slowdown still leaves the door open for further stimulus from the Federal Reserve.
by RTT Staff Writer
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