European stocks hold gains on Fed hopes; Dax up 0.20%

European stocks remained higher on Tuesday, after positive Spanish jobless data and as downbeat U.S. data on Monday dampened expectations for the Federal Reserve to scale back its stimulus program in the near future.

During European afternoon trade, the EURO STOXX 50 edged up 0.21%, France’s CAC 40 rose 0.14%, while Germany’s DAX 30 added 0.20%.
Official data showed that the number of unemployed people in Spain dropped by 98,300 in May, more than the expected 50,200 fall, after a 46,100 decline the previous month.

On Monday, data showed that activity in the U.S. manufacturing sector contracted for the first time in six months in May.

The Institute for Supply Management said its index of purchasing managers fell to 49.0, the lowest level since June 2009 and below the 50 level that separates contraction from growth.

Financial stocks remained broadly higher, as French lenders BNP Paribas and Societe Generale advanced 0.57% and 2.37%, while Germany’s Deutsche Bank surged 2.28%.

Peripheral lenders added to gains, with Spanish banks BBVA and Banco Santander climbing 0.97% and 1.45% respectively, while Italy’s Unicredit and Intesa Sanpaolo rallied 0.93% and 1.40%.

Elsewhere, chipmaker STMicroelectronics soared 5.57% after Chief Executive Officer Carlo Bozotti said that orders have been positive in all regions, adding that the company is seeking an increase of 5% to 10% in orders this year.

In London, FTSE 100 advanced 0.52%, as U.K. lenders tracked their European counterparts higher.

Shares in Lloyds Banking gained 0.73% and the Royal Bank of Scotland climbed 0.83%, while Barclays and HSBC Holdings jumped 1.18% and 1.31%.

Meanwhile, mining stocks also remained higher, as BHP Billiton and Rio Tinto rose 0.18% and 0.85% respectively, while Randgold Resources and Eurasian Natural Resources rallied 1.15% and 0.90%.

Separately, Glencore Xstrata gained 0.93% after saying it fired about 1,000 workers who participated in an unauthorized strike at three South African chrome production sites.

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.07% loss, S&P 500 futures signaled a 0.05% dip, while the Nasdaq 100 futures indicated a 0.04% gain.

Later in the day, the U.S. was to produce a report on the trade balance.

Albert Einstein

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