MW: Europe stocks rise with retail sales, PMI in focus
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stocks rallied on Tuesday, as investors cheered stronger-than-expected euro-zone retail sales for the euro zone and took inspiration from gains a day earlier in the U.S., where the Dow Jones Industrial Average closed at its second-highest level ever.
The Stoxx Europe 600 index XX:SXXP +1.42% added 1.3% to 292.61, setting it on track for the highest closing level since summer 2008.
Shares of outsourcing company Serco Group PLC UK:SRP +8.38% jumped 9.3%, after the firm reported a rise in full-year profit and lifted its dividend. See: Serco year pretax net up; dividend increased.
Deutsche Post AG DE:DPW +4.95% put on 4.9%, after the German logistics and mailing company posted higher 2012 profit and said it expected earnings to rise in 2013. See: Deutsche Post expects higher 2013 earnings.
For the broader European market, investors keyed off gains in the U.S. and in Asia, where bourses rebounded after tighter Chinese property mortgage rules sent markets lower. Shanghai stocks ended 2.3% higher, while U.S. indexes nudged closer to all-time highs. See: Stock gain lifts Dow average to 2nd highest level.
U.S. stock futures on Tuesday pointed to a higher open on Wall Street. See: Stock futures track global markets up; ISM ahead.
Investors were also paying close attention to European purchasing managers’ indexes along with retail sales ahead of Thursday’s European Central Bank policy meeting.
The Markit euro-zone PMI composite output index came in at 47.9 in February, above an earlier estimate of 47.3 but below January’s reading of 48.6. See: Euro-zone final Feb. PMI shows deeper downturn.
Retail sales surprised to the upside, with the January reading for the euro zone showing a 1.2% improvement, above market expectations.
Expectations for a rate cut at Thursday’s meeting have been rising in recent weeks, with some analysts seeing Tuesday’s data potentially pressuring the ECB.
“In all, further signs that the downturn in the euro zone is slowing come as a relief. But with activity remaining very weak, particularly outside Germany, the ECB will remain under pressure to implement further support policies this week and beyond,” said Jennifer McKeown, senior European economist at Capital Economics.
Banks posted some of the biggest gains, with Standard Chartered PLC UK:STAN +2.67% rising 2.7% in London, BNP Paribas SA FR:BNP +1.99% up 1.7% in Paris and Banco Santander SA ES:SAN +1.01% SAN +0.27% adding 1.2% in Madrid.
The U.K.’s FTSE 100 index UK:UKX +0.91% climbed 0.8% to 6,393.38, while France’s CAC 40 index FR:PX1 +1.42% gained 1.4% to 3,759.76.
Germany’s DAX 30 index DX:DAX +1.77% traded 1.6% higher at 7,815.59.
Outside the major indexes, shares of TomTom NV TMOAY -8.84% NL:TOM2 +1.83% advanced 4.3%. The Amsterdam producer of navigation equipment said that Toyota Motor Corp. TM -0.24% JP:7203 -0.21% would install TomTom’s HD Traffic product as standard equipment on all vehicles with Toyota’s Touch & Go navigation-and-entertainment systems.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
