European stocks are likely to edge higher on Thursday, extending the previous session's gains, as European Central Bank President Mario Draghi indicated that the central bank is in no hurry to exit stimulus as he anticipates inflation to come significantly below the bank's target this year. He said the central bank forecasts next year's inflation to be significantly below the 2 percent target.
Banks could be in focus after top European Union officials agreed to a provisional deal to overhaul banking rules for increasing the bloc's financial stability by capping bank bonuses and ensuring that European banks hold enough good quality capital to withstand future economic and financial shocks. The provisional agreement was reached after intense talks between EU lawmakers, the European Commission and representatives of the bloc's 27 governments in Brussels.
Asian stocks are rising across the board, with Japan's Nikkei index rallying 2.7 percent on a weaker yen after the government nominated Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, to be the next Bank of Japan governor. Also, official data showed that Japan's industrial production grew 1 percent in January, expanding for the second straight month, adding to evidence that the export-reliant economy is pulling out of a mild recession.
South Korea's Kospi average is adding 1.1 percent even as data showed the country's industrial output shrank unexpectedly in January from the prior month. Benchmark indexes in Australia, China, and Hong Kong are up between 1.3 percent and 2 percent.
Closer home, investors await gross domestic product figures from Switzerland and unemployment data from Germany for clues about the euro zone's economic outlook. Across the Atlantic, a revised GDP report for the fourth quarter and data on weekly jobless claims and Chicago area business activity could influence trading sentiment.
In corporate news, Standard Chartered Plc is in discussions to buy Morgan Stanley's Indian wealth management unit, the Bloomberg reported, quoting two people familiar with the discussions.
Essilor International reported fiscal 2012 pretax profit of 837.55 million euros compared to 697.58 million euros last year.
Dutch supermarket chain Koninklijke Ahold NV posted significantly lower fourth-quarter net income attributable to common shareholders of 158 million euros, compared with 270 million euros in the prior-year quarter.
German construction company Hochtief AG posted full-year profit after taxes of 385.58 million euros, as against a loss of 167.89 million euros a year earlier.
Deutsche Telekom AG reported fourth-quarter net profit of 793 million euros compared to a loss of 1.34 billion euros in the prior year quarter.
ADVA Optical Networking reported fourth quarter IFRS net income of 4.10 million euros or 0.08 euros per share compared to 8.68 million euros or 0.18 euros per share in the year ago period.
European stocks rebounded from the previous session's sell-off on Wednesday after economic reports from both sides of the Atlantic beat estimates and Rome conducted a successful auction of long-term debt, easing fears that the political deadlock could destabilize Europe as a whole. France's CAC 40 rallied 1.9 percent, the German DAX added a percent, the U.K.'s FTSE 100 advanced 0.9 percent and Switzerland's SMI gained half a percent.
U.S. stocks saw further upside overnight, as investors cheered a pair of upbeat reports on durable goods orders and pending home sales. Also, delivering his second consecutive day of Congressional testimony, Fed Chairman Ben Bernanke reaffirmed his support for maintaining the Fed's highly accommodative monetary policy. The Dow and the S&P 500 jumped about 1.3 percent each, while the tech-heavy Nasdaq added a percent.
by RTT Staff Writer
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