Forexpros –
Forexpros – European shares ended their longest streak of weekly losses since August Monday, as corporate takeover activity counteracted fears of a growing global economic slowdown.
At the close of European trade, the EURO STOXX 50 gained 0.42%, France’s CAC 40 advanced 0.51%, while Germany’s DAX added 0.63%. Meanwhile, in the U.K. the FTSE 100 gained 0.26%.
Corporate takeover speculation fuelled the equity rally as International Power jumped 3.2% as GDF Suez agreed to pay USD10 billion for a stake in the utility it doesn’t already own.
In addition, KPN reported its reviewing its Belgian mobile phone unit adding to the bullish takeover sentiment.
Helping boost stock sentiment, data indicated retail sales in the U.S. increased more-than-expected in March, building on the previous month’s strong gain.
The U.S. Commerce Department reported retail sales climbed by a seasonally adjusted 0.8% in March, beating expectations for a modest 0.3% gain.
February’s figure was revised to a 1.0% increase from a previously reported gain of 1.1%.
Core retail sales, which exclude automobile sales, rose by 0.8% last month, above expectations for a 0.6% gain, after rising by 0.9% in February.
However, a separate report showed that an index of manufacturing conditions in New York deteriorated in April, growing at the slowest pace since November.
The Federal Reserve Bank of New York said that its general business conditions index declined by 13.6 points to 6.6 in April from 20.2 in March. Analysts had expected the index to decline by 2.2 points to 18.0 in April.
Meanwhile, fears over increasing Spanish borrowing costs triggered investors to avoid riskier assets and move in to the relative safety of the U.S. dollar.
Spanish sovereign debt against default climbed to a fresh record earlier, amid fears that the country will be the next euro zone member to require a bailout.
Spanish 10-year yields rose above the key 6.0%-level in early trade Monday, striking 6.15%, the highest since December 1. Similar-maturity Italian yields increased to 5.66%, while Portuguese yields rocketed to 12.73%.
In addition, subduing market sentiment were Chinese growth figures released on Friday, indicating that the Chinese economy grew at the slowest pace in almost three years in the first quarter.
China is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
A deeper slowdown in China may impair a global expansion that is already weakening because of the implementation of harsh austerity measures in Europe.
Vestas Wind Systems soared 13% as Sinovel Wind Group and Xinjiang Goldwind Science are contemplating a bid for the alternative energy company.
Pernod Richards gained 1.6% as Morgan Stanley upgraded the distiller to overweight.
U.S. stocks are trading mixed with the Dow up 0.76%, the S&P 500 higher by 0.24% and the Nasdaq giving back 0.66%.
Traders are anticipating the German ZEW sentiment numbers, the Canadian interest rate decision, and a speech by ECB president Draghi on Tuesday.
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