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European stocks rebound before US results season

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(Globalpost/GlobalPost)

Europe's main stock markets rebounded on Monday, after slumping before the weekend on unexpectedly bad economic data, and ahead of the start of the US results season, dealers said.

In afternoon trade, London's FTSE 100 index of top companies rose 0.36 percent to 6,272.29 points, Frankfurt's DAX 30 added 0.16 percent to 7,671.03 points and in Paris the CAC 40 gained 0.30 percent to 3,674.59 points.

CMC Markets analyst Matt Basi said European markets pushed higher "as investors place a tentative bid under stocks ahead of the start of the US earnings season," said CMC Markets analyst Matt Basi.

In foreign exchange activity, the euro firmed to $1.3023 from $1.3004 late in New York on Friday.

The yen tumbled against the dollar in the wake of last week's Bank of Japan stimulus announcement. The greenback surged to 99.01 yen, which was the highest level since May 2009. It later pulled back to 98.60 yen.

US stocks pushed lower, carrying the negative momentum from Friday's disappointing US jobs report.

The Dow Jones Industrial Average dropped 0.26 percent to 14,528.09 points in early trading.

The S&P 500 slid 0.16 percent to 1,550.81 points, while the tech-rich Nasdaq Composite Index shed 0.06 percent to 3,202.06 points.

"Alcoa kicks off the US corporate earnings season later on Monday, as investors look for a distraction from Friday's woeful non-farm payrolls figure," said analyst Craig Erlam at trading group Alpari.

He added that first-quarter "earnings are expected to be down again for the company, which is continuing to suffer as a result of lower aluminium prices, with the consensus being $0.08 per share, down $0.02 from the same quarter a year earlier".

European equities had slumped on Friday after data showed that US job growth was much weaker than expected in March, signalling a slowdown in the world's biggest economy.

The travel sector continued its descent on Monday as dealers fretted over the impact of the bird flu outbreak in China.

Air-France KLM shares fell 1.78 percent at 6.62 euros in Paris deals, while shares in German carrier Lufthansa shed 0.53 percent to 14.06 euros in Frankfurt.

However shares in British Airways and Iberia owner IAG saw its share price climb 0.21 percent to 235.40 pence in London on positive analyst comment.

"After last week's volatility in the airline space, IAG find themselves coming in for support on comments from Morgan Stanley suggesting investors should move money into the sector, with concerns surrounding a recent outbreak of Asian Bird Flu 'overdone'," added analyst Basi.

Elsewhere, Asian markets turned mixed on Monday, as the US jobs report added to selling pressure, while continuing tensions on the Korean peninsula and the bird flu outbreak also weighed on sentiment.

However, Tokyo's Nikkei extended its rally after last week's BoJ stimulus news that has sent the yen reeling against the greenback. Tokyo rallied 2.80 percent to 13,192.59 points -- its highest close since August 12, 2008.

Seoul stocks shed 0.44 percent meanwhile, and Shanghai closed down 0.62 percent while Hong Kong finished on a flat note.

The Japanese central bank's announcement last week of a new wave of monetary easing has sent the yen tumbling about six percent against the dollar. This in turn has fuelled a run-up in Tokyo stocks, with exporters the big winners.

Dealers also eyed fresh developments in bailed-out Portugal over the weekend.

Portuguese Prime Minister Pedro Passos Coelho called on Sunday for severe cuts in public spending after a constitutional court rejected a number of austerity measures, as the EU warned the debt-hit nation to respect the aims of its international bailout.

Elsewhere on Monday, gold prices rose to $1,578.47 per ounce on the London Bullion Market, up from $1,568 on Friday.

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http://www.globalpost.com/dispatch/news/afp/130408/european-stocks-rebound-us-results-season-0