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European equities post slender gains

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(Globalpost/GlobalPost)

European stock markets rose on Tuesday, with London edging higher as British investors digested mixed data and mulled the death of former prime minister Margaret Thatcher, analysts said.

Sentiment was lifted by upbeat Chinese economic data and better-than-anticipated quarterly results from US aluminium giant Alcoa, they added.

In midday trade, London's FTSE 100 index of top companies rose 0.36 percent to 6,299.70 points. Elsewhere, Frankfurt's DAX 30 added 0.27 percent to 7,682.83 points and in Paris the CAC 40 gained 0.57 percent to 3,687.25.

The European single currency increased to $1.3044 from $1.3005 late in New York on Monday.

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 in European deals.

London investors absorbed 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 the trade deficit widened in February, largely because of a 1.1-percent slide in exports amid weaker demand from the crisis-hit eurozone.

"Following mixed industrial production and trade balance numbers, the UK market retreated from its highs, as traders mulled the death of former Prime Minister Baroness Thatcher, whose legacy has divided opinion as strongly in death as when she was in office," noted CMC Markets analyst Matt Basi.

Thatcher, widely known as the "Iron Lady", died at the Ritz Hotel in London on Monday aged 87 after suffering a stroke. Her funeral will be held on Wednesday April 17.

Asian stock markets mostly rose Tuesday, boosted by positive inflation data from China, but Tokyo's winning streak ended on profit-taking.

Gekko Markets analyst Anita Paluch added that European markets won further support from the Chinese data on Tuesday.

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.

"Markets are still up on the back of positive signals out of China, where inflation dropped sharply mainly due to lower food prices," Paluch noted.

Wall Street also provided a strong lead ahead of the January-March corporate earnings season, with the Dow Jones Industrial Average finishing 0.33 percent higher.

After the close, Alcoa reported a 59-percent rise in year-over-year earnings, pointing to strong efficiency gains and a slightly tighter supply market.

Alcoa, the first major US company to report first quarter earnings, 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.

"Stocks (in Europe) are up for the second day in a row after Alcoa reported better-than-expected figures after last night's US close," said analyst David Madden at traders IG.

"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."

Back in Asia, Tokyo ended flat, 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.

Elsewhere Tuesday on the London Bullion Market, gold prices eased to $1,572.50 per ounce from $1,577.25 late on Monday.

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http://www.globalpost.com/dispatch/news/afp/130409/european-equities-post-slender-gains