- US housing news cheers Europe
- Market expecting China stimulus
- Banks stage a mini recovery
FTSE 100: +1.36%
Dax 30: +1.31%
Stoxx 600: +1.28%
Cac 40: +1.45%
Ibex 35: +1.87%
FTSE MIB: +2.47%
Most European stock-markets ended the day up as good news from China and the US outweighed continuing concern over the sovereign debt crisis.
In the US, an index of the number of pending sales of previously owned houses climbed 5.9% in May, after retreating 5.5% in April. Analysts had been expecting a rise just above 1%.
Orders for durable goods were also better than expected in May, climbing 1.1%, according to the Commerce Department. This was the first such rise since February.
Meanwhile, there has been specualtion that China may ease monetary policy to encourage what is increasingly looking like a stalling economy. The most obvious lever to pull would be to reduce the amount of money Chinese banks have to set against their lending but other options, including increased government spending, remain open to the authorities.
On the home front, EU politicians meet in Brussels tomorrow for a summit during which further measures to combat the sovereign debt crisis will be considered. It’s thought Germany will come under pressure to allow more direct intervention by the European Central Bank, or to sign up to common debt issuance, otherwise known as ‘eurobonds’.
The strongest sector on the Stoxx Europe 600 index was banks, which gained 2.3%, the weakest was chemicals which rose just 0.28%.
German steel group Salzgitter fell nearly 6% after giving a gloomy outlook for the industry, saying that the Eurozone economy has deteriorated and steel processors are expecting business to ‘stagnate’.
Amongst the finance stocks benefiting from today’s mini bounce was Italy’s biggest bank, Unicredit, which gained 11.7% and Deutsche Bank which rose 2.5%.
The euro had fallen 0.26% by 16:45 to hit $1.2459.
Futures contracts on a barrel of Brent crude for August delivery were up 0.18% at 11:27 at $93.19.