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European stocks open higher on stimulus talk; Dax up 0.36%

Published 08/15/2014, 03:36 AM
Updated 08/15/2014, 03:36 AM
European stocks gain ground on ECB speculation - European stocks opened higher on Friday, as Thursday's disappointing economic growth reports from the euro zone fuelled fresh expectations for further easing measures by the European Central Bank.

During European morning trade, the DJ Euro Stoxx 50 rose 0.30%, France’s CAC 40 added 0.29%, while Germany’s DAX gained 0.36%. Markets in Italy were to remain closed for the Assumption Day holiday.

Preliminary data on Thursday showed the euro zone economy failed to grow in the three months to June. Economists had expected a small expansion of 0.1%.

Germany’s economy shrank by 0.2% in the three month to June, the first drop since 2012, while French gross domestic product was flat, the second consecutive quarter of stagnation.

The weak data indicated that the economic recovery in the euro area is losing momentum, adding to pressure on the ECB to do more to shore up growth after it cut rates to record lows in June.

Financial stocks were mixed, as BNP Paribas (PARIS:BNPP) rose 0.20% and Societe Generale (PARIS:SOGN) edged down 0.07% in France, while Germany's Commerzbank (XETRA:CBKG) added 0.14%.

Among peripheral lenders, Spain's Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) added 0.16% and 0.42% respectively.

Elsewhere, Hennes & Mauritz (ST:HMb) surged 2.40% after the clothing retailer said sales climbed 17% in July, exceeding analysts' estimates.

Also on the upside, Thyssenkrupp (XETRA:TKAG) gained 0.30% after HSBC upgraded the stock to "neutral" from "underweight".

In London, commodity-heavy FTSE 100 climbed 0.50%, led by mining giant Bhp Billiton (LONDON:BLT), up 3.15%, amid reports the company may announce a spinoff of assets estimated to be worth as much as $12 billion next week.

Rivals Vedanta Resources (LONDON:VED) and Fresnillo (LONDON:FRES) added to gains, advancing 0.76% and 0.97% respectively, while Rio Tinto (LONDON:RIO) and Glencore Xstrata (LONDON:GLEN) jumped1.35% and 1.39%.

In the financial sector, stocks were also mostly higher. Shares in the Royal Bank of Scotland (LONDON:RBS) rose 0.40% and Lloyds Banking (LONDON:LLOY) climbed 0.76%, while Barclays (LONDON:BARC) gained 0.83%. HSBC Holdings (LONDON:HSBA) underperformed on the other hand, slipping 0.25%.

Meanwhile, SVG Capital (LONDON:SVI) saw shares dive 6.29% after Permira Holdings Ltd. sold its entire stake in the company.

In the U.S., equity markets pointed to a moderately higher open. The Dow 30 futures pointed to a 0.07% gain, S&P 500 futures signaled a 0.08% rise, while the Nasdaq 100 futures indicated an increase of 0.14%.

Later in the day, the U.S. was to release reports on manufacturing activity in New York state and industrial output, as well as preliminary data on consumer sentiment.

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