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European equities diverge on data

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(Globalpost/GlobalPost)

European stock markets ended mixed on Tuesday, with London gaining on data showing Britain may escape a triple-dip recession while Frankfurt retreated on disappointing trade data.

London's FTSE 100 index of leading companies ended the day with a gain of 0.58 percent to 6,313.21 points, Paris' CAC40 edged out an 0.11 percent rise to 3,670.72 points in choppy trade, while in Frankfurt the DAX 30 dropped 0.33 percent to 7,637.51 points.

"A weaker than expected Chinese inflation number and a better than expected earnings report from Alcoa in the US has given basic resource stocks a lift today, helping push the London market higher however broader European markets have struggled for traction, with the DAX in particular underperforming," said CMC Markets UK analyst Michael Hewson.

Beijing unveiled data showing inflation at 2.1 percent in March, well down from the 10-month-high of 3.2 percent seen the month before and below forecasts for 2.4 percent.

The news eased investor concerns that another high figure would prompt authorities to tighten monetary policy further.

"All else equal, the more growth there can be in China, the more demand there will ultimately be for basic materials," added Briefing.com's Patrick O'Hare.

London trading was also lifted by news that manufacturing output rose 0.8 percent in February from January, dampening speculation that the economy returned to recession in the first quarter of 2013.

However, separate data showed that Britain's trade deficit widened in February, largely because of a 1.1-percent slide in exports amid weaker demand from the crisis-hit eurozone.

Trading in Frankfurt was dampened by data showing that German exports fell in February, in another sign that Europe's biggest economy has not fully recovered from a dip at the end of last year.

The European single currency increased to $1.3087 from $1.3005 late in New York on Monday.

"Without momentum from the data side EUR-USD has been able to establish itself above the 1.30 mark without generating stronger momentum though," said analysts at Commerzbank.

The yen slumped further against the dollar, after last week's Bank of Japan stimulus news. The greenback surged overnight to 99.66 yen -- the highest level since May 2009. It stood at 98.93 yen in European deals, down from 99.36 late on Monday.

Asian stock markets mostly rose Tuesday, boosted by positive inflation data from China, but Tokyo's winning streak ended on profit-taking, edging down following an almost 10-percent rally since Wednesday fuelled by the BoJ stimulus measures.

Tokyo investors have gone on a buying spree since the Bank of Japan last week unveiled a huge stimulus package aimed at reversing decades of deflation.

On the upside, Sydney added 1.45 percent, Seoul gained 0.11 percent and Shanghai won 0.64 percent, while Hong Kong increased by 0.70 percent in value.

A strong start of the corporate earnings season also lifted sentiment in early European trading, with Alcoa reporting after markets closed a 59-percent rise in year-over-year earnings, pointing to strong efficiency gains and a slightly tighter supply market.

Alcoa said profits came in at $149 million, up from $94 million in the same period last year. However, sequential profits were down from $242 million in the prior quarter.

"The first company to unveil its update in a reporting season can often set the tone; traditionally we have seen a small correction between quarterly seasons and a rally when companies post results," said analyst David Madden at traders IG.

But the glow quickly wore off, with US stocks wobbly in early trading.

The Dow Jones Industrial Average showed a gain of 0.12 percent to 14,631.70 points in midday trading.

The broad-based S&P 500 added 0.09 percent to 1,564.52 points, while the tech-rich Nasdaq Composite Index edged up 0.3 percent to 3,223.33 points.

Elsewhere Tuesday on the London Bullion Market, gold prices ended flat at $1,577.25.

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http://www.globalpost.com/dispatch/news/afp/130409/european-equities-diverge-data