European Markets Climbed On Economic Data

(RTTNews) - The European markets finished solidly in positive territory Wednesday, following yesterday's shaky performance. Investor sentiment received a boost from several better than expected European economic results, which overshadowed the weak PMI data from China. The stronger than expected U.S. new home sales in the afternoon provided further support.

China's factory activity fell to the weakest level in eleven months in July amid a continued slide in new orders and faster destocking, preliminary results of a survey by Markit Economics and HSBC revealed Wednesday. The purchasing managers' index, an indicator of the country's factory sector performance, fell to 47.7 in July from 48.2 in June.

Poland's economic growth may bounce back next year, driven by an improvement in consumption and credit conditions, a report from the International Monetary Fund said Tuesday. The Washington-based lender now projects the gross domestic product to expand 2.25 percent in 2014 after moderating to 1.1 percent in 2013. The 2013 estimate was slightly lower than May's projection of 1.2 percent expansion.

Credit standards for loans to euro area consumers eased for the first time in nearly six years in the second quarter of 2013, the European Central Bank said in its latest quarterly Bank Lending Survey, released Wednesday.

Credit standards for consumers have fallen for the first time since end-2007 to a net easing of 2 percent in the second quarter from a net tightening of 7 percent from the first quarter, the ECB said in the report.

At the same time, the net percentage of banks reporting a further tightening of credit standards on loans to non-financial corporations (NFCs) stood unchanged at 7 percent. In the case of housing loans, the degree of net tightening eased to 7 percent from 14 percent.

The continuing increase in Eurozone's consumer confidence and an improvement in purchasing power from muted inflation will likely help economic activity to stabilize in the near term, and then to start growing over the later months of the year, IHS Global Insight Chief European and UK Economist Howard Archer said.

The firm, however, downplayed hopes of a marked overall pick up in consumer spending in the near term at least, given the fact that consumer confidence still remained below its long-term norms. Households' purchasing power has also been squeezed by high and rising unemployment, generally muted wage growth and tight fiscal policy.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.05 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.44 percent.

The DAX of Germany climbed by 0.78 percent and the CAC 40 of France advanced by 1.01 percent. The FTSE 100 of the U.K. rose by 0.35 percent and the SMI of Switzerland gained 0.34 percent.

In Frankfurt, Daimler rose by 1.27 percent. The carmaker reported a significant increase in its second-quarter profit, helped by a gain from the sale of its stake in Airbus maker European Aeronautic Defence and Space Co.

In France, Alstom increased by 1.46 percent. The speed-train maker said it expects to ramp up sales in the current year after first-quarter sales dropped 4 percent to 4.583 billion euros from 4.777 billion euros in the year-ago period.

In London, EasyJet surged by 3.67 percent. The airline reported a quarterly rise in revenues and issued strong full-year profit guidance.

ARM Holdings fell by 1.06 percent, after the chipmaker reported a 26 percent rise in second-quarter revenues.

Kingfisher climbed by 3.17 percent, after it reported a 2.5 percent increase in comparable store sales for the 10-week period ended July 13.

Tate & Lyle gained 3.58 percent, after its profit matched expectations.

Syngenta dropped by 3.99 percent in Zurich. The agribusiness firm reported a decline in the first-half net income, mainly reflecting the absence of prior year's milestone corn rootworm trait royalty income.

Eurozone private sector activity expanded more-than-expected to an 18-month high in July, led by Germany, signaling an early exit from recession in the third quarter, preliminary survey data from Markit Economics showed on Wednesday.

Rising for the fourth successive month, the flash composite output index, posted its first expansion since January 2012, according to results of the survey carried out among purchasing managers across the region. The index that measures business activity in both manufacturing and services sectors, climbed to 50.4 in July from 48.7 in June.

German private sector business activity rose at the fastest pace in five months in July, preliminary results of a survey by Markit Economics showed Wednesday. The composite output index, that measures performance of both manufacturing and services, rose to a five-month high of 52.8 in July from 50.4 in June.

An indicator of French manufacturing performance improved to its highest level in seventeen months in July, but the index score suggested that activity was still in contraction. The manufacturing purchasing managers' index rose to 49.8 in July from 48.4 in June, preliminary results of a survey by Markit Economics revealed Wednesday.

British manufacturers' order book balance improved sharply in July to the highest level in seven months, and firms expect further growth in orders in the coming months, data from a survey by the Confederation of British Industry (CBI) showed Wednesday.

The latest industrial trends survey showed that manufacturers' order book balance increased to -12 percent in July from -18 percent in June..The figure matched economists' expectations.

New home sales in the U.S. rose by much more than anticipated in the month of June, according to a report released by the Commerce Department on Wednesday, although the report also showed downward revisions to the data for the past few months.

The report said new home sales surged up by 8.3 percent to an annual rate of 497,000 in June from the revised May rate of 459,000. Economists had expected new home sales to climb to an annual rate of 481,000 from the 476,000 originally reported for the previous month.