Market Commentary and Intraday News

European Stocks Seen Lower After Japanese Trade Data

302 days ago

(RTTNews) - European stocks are set to open lower on Wednesday, mirroring a weak trend across Asia after Japan posted a wider-than-expected trade deficit for July, with merchandise deficit widening to 517.382 billion yen in the month compared with forecasts for a shortfall of 270.0 billion yen following the downwardly revised 60.3 billion surplus in June.

The data adds to evidence of a slowing global economy as European leaders meet this week to discuss details of the bailout package for debt-stricken Greece.

Ahead of a meeting with the leaders of Germany and France, Greek Prime Minister Antonis Samaras told German daily Bild that Greece needs more time to implement the reforms and spending cuts requisitioned by the country's international creditors.

Clarifying that he is not asking for additional money, Samaras told the daily that Greece needs room to breathe, to keep the economy afloat and to boost government's revenue. "We will stand by our commitments and fulfill all the requirements" of the bailout program, he added.

Meanwhile, investors wait for the release of the Federal Reserve's minutes of its most recent policy meeting due later today for clues as to whether the Fed will announce a third round of quantitative easing at its next meeting on Sept. 12.

In corporate news, Italian insurer Assicurazioni Generali SpA is planning an exit from the U.S. by putting its U.S. life reinsurance business up for sale, media reports suggest.

Dutch brewer Heineken N.V. reported a 1.6 percent rise in first-half net profit to 705 million euros and said it expects net profit to be broadly in line with last year for the full year 2012.

Belgium-based food retailer Delhaize Group reported a 26 percent plunge in second-quarter net profit to 87 million euros.

Mining giant BHP Billiton reported a drop in full-year attributable profit to $15.42 billion from last year's $23.65 billion, while adjusted attributable profit before exceptional items slid 21.1 percent year-over-year to $17.12 billion.

European stocks ended notably higher on Tuesday amid reports that the European Central Bank is considering buying bonds from troubled eurozone countries such as Italy and Spain in order to reduce borrowing costs. A successful debt auction by Spain and reports that China is planning new economic stimulus for the second half of the year also contributed to the positive mood.

The Euro Stoxx 50 index of eurozone bluechip stocks gained a percent and the Stoxx Europe 50 index, which includes some major U.K. companies, rose 0.2 percent, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 closed up between 0.2 percent and 0.9 percent.

U.S. stocks failed to sustain an early upward move overnight, as traders seemed somewhat reluctant to continue buying stocks following recent strength and amid a lack of major U.S. economic data. The Dow slid half a percent, the tech-heavy Nasdaq slipped 0.3 percent and the S&P 500 lost 0.4 percent.

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