MW:U.K. data boost Europe stocks; banks, oil firms up
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — A surprise improvement in U.K. manufacturing data sent European stock markets sharply higher on Tuesday, while investors also took in developments from a meeting of the region’s finance ministers and poor Chinese trade data.
The Stoxx Europe 600 index XX:SXXP +1.09% rallied 1.2% to 256.42 in a choppy session, after falling 0.4% on Monday on global-growth worries and concerns about the sovereign-debt crisis.
ASML Holding NV NL:ASML +7.81% ASML -1.94% posted the biggest jump in the index, 9%, after the microchip-equipment maker announced a deal that could see Intel Corp. INTC +0.06% invest more than $4 billion in the company.
Oil firms were also rising, with France’s Total SA FR:FP +0.77% TOT -0.18% up 0.7% and the U.K.’s BP PLC UK:BP +1.22% BP +0.10% 1.2% higher.
Catalyzing the rise
For the broader European markets, stocks wobbled in early action, but were sent firmly higher after encouraging data from the U.K.
“The catalyst to turn things around was U.K. manufacturing data, which came in better than expected,” said Phil Ball, broker at Valbury Capital. The data “were mainly boosted by the export industry, where we are starting to see an improvement from a weaker sterling. It makes U.K. exports far more competitive and that’s what we want.”
Manufacturing output rose 1.2% in May on a monthly basis, beating analyst expectations of a 0.2% decline. In addition, industrial production dropped less than forecast.
“It's a step in the right direction, but there are still plenty of problems around. There’s the euro crisis and fears of a global slowdown,” Ball added.
In that regard, investors digested disappointing Chinese trade for June, when imports grew at a weaker-expected rate while exports also slowed, fueling fears that China’s slowdown is deepening. China imports disappoint, exports slow
In Europe, the latest developments in the battle against the euro area’s debt and banking crisis also caught investors’ attention.
European finance ministers on Monday reached a deal to make 30 billion euros ($36.9 billion) in aid available to Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline. Europe to extend Spanish deficit deadline
The yield on the 10-year Spanish government bond ES:10YR_ESP -2.88% fell 22 basis points to 6.79%, according to electronic trading platform Tradeweb.
The Spanish IBEX 35 index XX:IBEX +1.46% jumped 1.7% to 6,800.80, with Banco Santander SA ES:SAN +1.33% SAN -1.98% up 1.4% and BBVA SA ES:BBVA +0.69% BBVA -0.96% 2.6% higher.
