RTTN: European Markets Trade Cautiously Amid Manufacturing Data
(RTTNews) - The European stock markets are edging higher Tuesday morning after euro zone manufacturing activity improved by much more-than-expected in October. However, traders remain cautious ahead of Wednesday's FOMC meeting.
U.S stock futures are also pointing to a higher open. Yesterday, U.S. stocks ended flat as traders preferred the 'wait-and-watch' game ahead of the mid-term elections and the FOMC meeting, which is widely expected to announce second round of quantitative easing measures. The consensus expectation is for about $500 billion in repurchase program by the Fed.
Elsewhere, Asian stocks ended mixed after the Reserve Bank of Australia unexpectedly hiked its cash rate by 25 basis points to 4.75%. Meanwhile, the Reserve Bank of India raised its repurchase rate by 25 basis points to 6.25%.
In the commodities market, crude for December delivery is up $0.32 to $83.27 a barrel. Meanwhile, the price of gold is moving higher, with gold for December delivery adding $7.60 to $1,358.20 an ounce.
In economic news, manufacturing activity in the euro zone improved more than initially estimated in October, survey results from Markit showed. The final Purchasing Managers' Index for October rose to 54.6 in October from September's eight-month low of 53.7. The flash estimate for October was 54.1.
Meantime, Germany's manufacturing sector expanded again in October, largely helped by strong new orders, survey data from Markit Economics showed. The seasonally adjusted Markit/BME Purchasing Managers' Index, a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy, rose to 56.6 in October from 55.1 in the previous month.
In an indication that construction will have less of a positive impact on UK's GDP compared to the previous quarter, the seasonally adjusted Markit/Chartered Institute of Purchasing & Supply construction Purchasing Managers' Index fell to 51.6 in October, the lowest reading in the current eight-month sequence of expansion. The expected reading was 53.
Among stocks, BP Plc is edging up over 1% after it said its profit fell 66% after taking a further pre-tax charge of $7.7 billion related to the Gulf of Mexico well disaster. Third-quarter net income dropped to $1.8 billion from $5.3 billion in the year-earlier period.
U.K's third-largest natural-gas producer BG Group Plc is adding over 2% after reporting a 12% jump in its third-quarter profits.
Basilea Pharmaceutica is up over 1%. The company said it has received a milestone payment of 5.5 million euros under its distribution agreement for Toctino, or alitretinoin, with Almirall, S.A.
