European shares climb on the back of German data
Fiona Cincotta February 19, 2013 10:10 PM
<p>European markets extend gains reaching three-week highs following strong German data. By the end of trading the FTSE had gained just shy of 1%, the […]</p>
European markets extend gains reaching three-week highs following strong German data. By the end of trading the FTSE had gained just shy of 1%, the DAX over 1.6% and the CAC jumped over 1.8%.
Shares across Europe were boosted by the stronger than forecast German ZEW business sentiment data. The figure for February of 48.2 smashed both the expectation of 35 and the January figure of 31.5. This is the highest sentiment figure since April 2010 and very much underlines the expectation that 2013 could be the year when the Eurozone crisis bottoms out and the recovery begins. Despite German growth figures recording a contraction of 0.6% in Q4 of last year this positive sentiment figure adds to comments by the Bundesbank yesterday that the German economy is not expected to fall into recession this quarter.
However, we should not get carried away with the survey data and keep an air of caution especially considering car registration data released this morning which reached a new low for January with an 8.5% decline. The poor figure is stark contrast to the German sentiment data and reflects the worsening state of the European car market, a sector strongly hit by the economic problems of the Eurozone.
Looking at equities, most UK stocks traded positively although Vodafone and HSBC put pressure on the FTSE following broker downgrades. On the positive side Tesco climbed higher after JP Morgan gave the supermarket retailer an overweight rating but Sainsbury’s and Morrison’s were stamped with underweight ratings causing their share prices to decline 0.15% and 1.17% respectively.
Tomorrow looks to be a full day with regards to economic data with inflation figures due from both Germany and Europe then we have the Jobless figures out for the UK in the morning. Going into the afternoon European Consumer confidence, US housing starts and minutes from the FOMC Meeting will catch investors eyes.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.