Forexpros – European stocks were higher on Tuesday, as weak data from the euro zone on Monday added to expectations for further easing measures ahead of this week’s European Central Bank monetary policy meeting.
During European morning trade, the EURO STOXX 50 rose 0.67%, France’s CAC 40 advanced 0.53%, while Germany’s DAX 30 climbed 0.65%.
Data showed on Monday that the final reading of the euro zone’s manufacturing index came in at 45.1 in June, holding steady at its lowest level since June 2009.
Investors were looking ahead to the outcome of the ECB’s monetary policy meeting on Thursday, amid growing expectations for a rate cut.
Meanwhile, dismal data from the U.S. also fuelled speculation that the Federal Reserve may implement a third round of quantitative easing, to shore up growth in the U.S. economy.
Financial stocks were broadly higher, led by France’s Credit Agricole, up 2.13%, and closely followed by Dutch lender ING Group, with shares surging 1.97%.
The National Bank of Greece said earlier that it held talks with Credit Agricole, which was reportedly seeking to sell its Greek subsidiary Emporiki.
Societe Generale and BNP Paribas also rallied 1.90% and 0.66%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, advanced 0.86% and 0.51% respectively.
Auto makers also contributed to gains, as shares in Peugeot climbed 2.67%, after saying on Monday that it will announce a highly anticipated cost-savings plan on July 12.
Separately, a report by France’s auto makers’ association, CCFA, showed that demand for Peugeot cars continued to fall in June as the French car market shrank at a slower pace than earlier in the year.
Shares in German companies Volkswagen and BMW rallied 1.43% and 1.45% respectively, while Italy’s Fiat climbed 1.53%.
In London, commodity-heavy FTSE 100 added 0.27%, boosted by strong gains in mining stocks.
Shares in Rio Tinto and BHP Billiton advanced 1.90% and 0.98%, while copper producers Xstrata and Kazakhmys rose 0.76% and 2.40% respectively.
Oil and gas major Anglo American added to gains, with shares climbing 0.81%, but BP saw shares drop 0.90% as the group faced new demands on Monday to release emails about a failed Arctic oil alliance with Russian company Rosneft that led to a USD12.5 billion shareholder suit.
Elsewhere, financial stocks were mixed. Shares in Barclays rallied 0.94% and HSBC Holdings added 0.11%, while Lloyds Banking and the Royal Bank of Scotland fell 0.14% and 1.21% respectively.
Earlier in the day, Barclays chief executive Bob Diamond announced his resignation following the Libor scandal that last week saw the bank fined a record amount by U.S. and U.K. regulators. Chancellor of the Exchequer George Osborne said Diamond did “the right thing for the bank and the country”.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.02% loss, S&P 500 futures signaled a 0.03% gain, while the Nasdaq 100 futures indicated a 0.15% rise.
Later in the day, the U.S. was to release official data on factory orders.
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