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Europe: sentiment turns bullish intraday

Natalia Asedova, Analyst, Global Markets (Finam)

On Monday, April 2, European equity benchmarks largely saw gains. Early in the day, equities traded in negative territory on news that Bundesbank had stopped accepting the bonds of Ireland, Portugal and Greece as debt securities, but sentiment turned bullish later in the day after the German central bank refuted the information. Additional positivity came from macroeconomic data, showing higher production both in the USA and China. The ISM manufacturing index came in at 53.4 for March, climbing from 52.4 in February, while analysts had generally forecast 53. Meanwhile, China’s manufacturing PMI, published by China’s Statistics Bureau, rose to 53.1 in March from 51 the previous month. The Eurozone Business Activity index remained unchanged in March at the previous level of 47.7.

Despite negative data, including an increase in the Eurozone unemployment rate to 10.8% in February and a 1.1% slide in US construction spending in the same month, markets stayed mostly in positive territory, except for Austria and Italy, where the benchmarks retreated, although insignificantly.

In the upshot, the British equity benchmark FTSE 100 rallied 10.85%, the French CAC 40 added 1.14% and the German DAX gauge advanced 1.58%. Meanwhile, regional indicator STXE 600 climbed 1.46% to close at 267.16.

Oriflame Cosmetics saw its market cap increase 2.6% amid news that the US cosmetics producer Coty made a takeover offer to Avon Products, assessing the company at USD 10 bn, or USD 23.25 per share.

British ceramic coatings producer Cookson Group gained 6% in value amid unofficial reports that the company is considering selling its electronics subdivision.

French auto manufacturers underperformed the market on reports new car sales in France dropped 22% in March. Peugeot Citroen and Renault slumped 3.3% and 1.3%, respectively, on the news.

The Danish pharmaceutical company Novo Nordisk was among the top advancers, adding a hefty 5.6% to its market cap after confirming its plans to come up with a new drug for obesity treatment in 2014. Before the European trading session opened, futures for primary regional stock indexes were trending upward, taking their cues from yesterday’s bullishness. Addition support came from the US stock market’s close in positive territory.

By 6:21 am GMT, British FTSE 100 index futures for June settlement were trading 0.26% higher, German DAX index futures for June settlement were up 0.23% and French CAC 40 benchmark index futures for April settlement were 0.12% higher.

Index Country   Value     Change    Change, %    YTD, %
ATX Austria 2,154.53 -4.53 -0.21% 13.90%
BEL20 Index Belgium 2,354.53 30.48 1.31% 13.01%
FTSE 100 United Kingdom 5,874.89 106.44 1.85% 5.43%
DAX Index Germany 7,056.65 109.82 1.58% 19.64%
IBEX 35 INDEX Spain 8,042.80 34.80 0.43% -6.11%
S&P/MIB Italy 15,948.90 -31.21 -0.20% 5.69%
AEX Netherlands 326.39 2.88 0.89% 4.45%
OMX Nordic 40 Scandinavia 1,024.53 18.14 1.80% 13.87%
CAC 40 France 3,462.91 39.10 1.14% 9.59%
SMI Switzerland 6,299.38 63.87 1.02% 6.12%