Shares of steelmaker ThyssenKrupp surge on divestment plan
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Banking stocks helped to underpin gains for European markets on Friday, but trading was volatile ahead of U.S. nonfarm-payrolls data and as commodity-related shares stayed under pressure.
The Stoxx Europe 600 index ST:STOXX600 +0.23% rose 0.1% to 278.12 after closing down 0.3% in the prior session.
U.S. stock futures were higher on Friday, after losses Thursday due to a surprise rise in jobless claims, which hit both equities and commodity prices. Silver futures continued a sharp decline after their biggest one-day percentage drop since December 2008.
“We opened on the back of commodities and raw materials continuing their slide down. Europe markets have turned around partly because of banks, but also because sellers have stepped away,” said Simon Brown, CEO of ProSpreads.
He said markets would like to continue trekking higher until the release of jobs data for April, due at 8:30 a.m. Eastern. Economists surveyed by MarketWatch forecast a jobs gain of 175,000 in April.
“I think if the U.S. numbers are in line, European markets will probably rally into the weekend. Momentum is there,” Brown said, adding that the Stoxx Europe 600 is set to lose just over 2% this week.
In Europe, data showed German March industrial production up 0.7%, which was higher than the 0.3% expected by forecasters.
“At least, the outlook for household spending in Germany looks brighter than elsewhere in the region. Nonetheless, there are still few convincing signs that there will be a strong pick-up in consumer spending,” said Ben May, European economist at Capital Economics, in a note to investors.
Oil weighs
Crude oil for June delivery CLM11 -2.65% fell $2.42 to $97.39 a barrel, which weighed on the prices of related stocks. Heavyweights Royal Dutch Shell PLC RDS.A -3.46% UK:RDSA -1.59% and BP PLC BP -0.60% UK:BP -0.75% fell 1.6% and 1.5%, respectively.
The FTSE 100 index UK:UKX -0.28% fell 0.4% to 5,999.56. On the upside, shares of International Consolidated Airlines Group UK:IAG +2.72% rose 2.9% after it swung to a first-quarter net profit, as revenue rose 15%.
Banks were also largely in the black across Europe, led by Royal Bank of Scotland Group PLC UK:RBS +6.32% RBS +6.02% , up 5.5%. RBS reported a first-quarter net loss that more than doubled, but impairments on bad loans dropped 27% from a year earlier. Read RBS loss widens, impairment charges improve
Shares of Lloyds Banking Group PLC UK:LLOY +0.96% rose 1%, a day after heavy losses due to disappointing results.
The German DAX 30 index DX:DAX +0.56% rose 0.6% to 7,418.67, led by a 6.5% rally for shares of ThyssenKrupp AG DE:TKA +6.70% after the steelmaker announced a €10 billion divestment plan. The company plans to spin off its stainless-steel group and sell automotive assets.
Also higher, shares of Deutsche Lufthansa AG DE:LHA +4.39% rose 5.6% after UBS lifted the airline group to buy from neutral. UBS said it remains confident that the underlying operating performance of the group is on track. “A sustainable fall or stable oil price coupled with valuation should provide the upside catalyst,” the broker said.
Shares of Commerzbank AG DE:CBK +0.62% rose 1.6% as the bank confirmed first-quarter figures that were pre-announced on Monday. “Given a stable market environment, we anticipate an operating profit in the 2011 financial year that is substantially higher than the 2010 figure,” the bank said.
The French CAC 40 index FR:PX1 +0.31% rose 0.3% to 4,014.10, helped by a 1% rise for drug firm Sanofi-Aventis FR:SAN +0.98% SNY +0.74% .
Shares of Alcatel-Lucent SA ALU -3.83% , FR:ALU -4.31% fell 2.6%. The telecom-equipment maker’s first-quarter net loss narrowed to 10 million euros ($14.5 million), which beat expectations, though revenue fell slightly short of forecasts. But shares of Alcatel-Lucent have seen a strong run this year, rallying 88%. Read Alcatel-Lucent's loss narrows sharply
The Spanish IBEX 35 index XX:IBEX -0.93% was a standout decliner in Europe, off 1% to 10,529.10. Losses were led by a 3.3% fall for shares of BBVA SA BBVA -3.96% ES:BBVA -1.14% and a 2.1% fall in shares of Banco Santander SA STD -3.26% ES:SAN +0.27% .
BBVA reported results on Thursday. Analysts at Royal Bank of Scotland said BBVA is still facing hurdles, especially in its domestic markets.
“We expect further earnings downgrades and therefore share price weakness over coming days,” said the analysts, who rate BBVA a hold, in a note on Friday.
