The European markets may extend a two-day rally on Monday, buoyed by a strong close on Wall Street Friday and firm Asian equities, after some reassuring comments from the U.S. Federal Reserve chief Ben Bernanke about the U.S. economy and the Bank of Japan's move to extend an emergency-loan program spurred bargain hunting.
The Bank of Japan announced an expansion to its low-interest lending program after an extraordinary policy board meeting on Monday, as it bids to stem the rise in the yen. At the same time, the bank also maintained its key interest rate at near-zero.
In a 8-1 split vote, the policy board of the central bank, led by Governor Masaaki Shirakawa, decided to introduce a new JPY 10 trillion six-month fund supplying measure, in addition to the JPY 20 trillion three-month loan measure it already has in place. Board member Miyako Suda voted against the move.
Closer home, house prices in England and Wales dropped at the fastest pace in 16 months in August, figures showed on Monday. The fall was due to supply continuing to outstrip demand. The average asking price for a home decreased 0.3% month-over-month to GBP 158,300, reports said citing data from Hometrack. This represents the biggest recorded fall in house prices since April 2009 after a 0.1% fall in July.
Economic sentiment data from the eurozone along with inflation data from Spain are due later in the day. The economic sentiment indicator is seen remaining unchanged at 101.3. The consumer sentiment index is also seen remaining unchanged, while industrial sentiment indicator is seen falling to -5 from -4 in July.
Japanese stocks led a rally in Asian equities, lifting the MSCI Asia Pacific index up by about 1.5 percent this morning. The Dow futures are up 27 points, paring some initial gains, while crude futures are unchanged with a negative bias on profit taking after three sessions of consecutive gains.
On Wall Street, stocks rallied to close out the week on Friday, after Ben Bernanke reassured investors that the Fed would take action if economic conditions worsen further.
The markets also benefited from a downward revision to second quarter GDP growth that was not quite as severe as some had feared. The major averages saw significant upside in late-session trading, closing near their best levels of the day. The Dow rallied 1.7%, the Nasdaq gained 1.6% and the S&P 500 rose 1.7%.
Bernanke stated that the Fed is "prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly." He also called the economic outlook "inherently uncertain," stressing that the fragile economy "remains vulnerable to unexpected developments."
In domestic corporate news, Swiss drugmaker Roche Holding AG is likely to announce massive job cuts this week in all areas of the pharmaceutical division, Sonntag reported, citing unidentified sources familiar with the situation.
Chip maker Intel Corp announced a deal to acquire the wireless-chip manufacturing unit of German chip maker Infineon Technologies AG for about $1.4 billion in cash as it looks beyond its core computer chip business.
Spain's lender Banco Santander SA said it signed a pact to buy HSBC Holdings Plc's portfolio of U.S. car loans for $4 billion.
French oil firm Etablissements Maurel & Prom SA reported first-half net profit of EUR51 million versus EUR2 million a year earlier.
E-commerce software developer Cameleon Software posted a first-half net loss of EUR0.23 million on consolidated sales of EUR4.07 million.
Pharmaceuticals giant Sanofi-Aventis SA said it has submitted a non-binding proposal to acquire Genzyme Corp. for $69 per share in an all-cash transaction valued at approximately $18.5 billion.
The European markets closed a choppy session moderately higher Friday, with telecom stocks leading the gainers and positive cues from Wall Street underpinning sentiment. The U.K.'s FTSE 100 Index closed up 0.88%, the French CAC 40 gained 0.93% and the German DAX added 0.65%.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.