European stocks rose for a second day on Thursday as investors await key interest rate decisions in the eurozone and Britain. Investor mood remains slightly upbeat after German daily Sueddeutsche Zeitung reported that the European Central Bank and the euro zone's permanent rescue fund, the European Stability Mechanism, were planning coordinated action to buy Spanish and Italian government bonds.
Meanwhile, Spain successfully raised more than the maximum target of EUR 3 billion from its debt auction at higher costs, with 10-year bond yields inching up to 6.647 percent, up from the 6.43 percent paid at the prior auction on July 5.
The Euro STOXX 50 Index is currently up 0.63 percent, while the broader Stoxx Europe 50, which also includes U.K. stocks, is moving up 0.72 percent. Around Europe, the German DAX, France's CAC 40, the U.K.'s FTSE 100 and Switzerland's SMI are moving up between 0.3 percent and 0.9 percent.
The Bank of England will announce its latest interest rate decision in a short while from now, while the ECB's decision is due at 7.45 am ET. As expectations remain high for strong European Central Bank action to quell the region's sovereign debt crisis, there is considerable scope for disappointment.
Asian markets ended on a mixed note after the Federal Reserve moved a step closer to pumping additional stimulus, but didn't announce any measures following last month's extension of Operation Twist. Offering a sobering assessment of the U.S economy, the Fed predicted that economic growth would remain moderate over the coming quarters.
In stock specific action, shares of Deutsche Post DHL are climbing 4.2 percent after the German postal and logistics firm lifted its fiscal 2012 forecast for EBIT, a key earning metric.
Continental AG is rallying 3.3 percent after the tire maker reported higher second quarter net income and sales. Airliner Lufthansa is climbing 3 percent after it posted operating profit that beat consensus estimates.
ING Group is moving up 0.4 percent in Amsterdam after the company said it is reviewing strategic options for ING Direct Canada and ING Direct UK.
In economic releases, eurozone industrial producer prices fell 0.5 percent month-over-month in June, the same rate of decline as seen in the prior month, Eurostat reported. Economists had expected a more modest decrease of 0.4 percent. On a yearly basis, inflation eased to 1.8 percent from 2.3 percent in May.
Separately, data from Markit Economics showed that the U.K. construction sector logged a bigger than expected growth in July, driven by an increase in commercial output. The Chartered Institute of Purchasing & Supply/Markit Purchasing Managers' Index rose to 50.9 in July from 48.2 in June. The reading was forecast to rise to 48.7.
Commodities are trading mixed, while the Dow futures point to a firmer start on Wall Street ahead of factory orders data as well as initial jobless claims numbers due later in the day.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis