By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets trimmed losses on
Tuesday, as upbeat earnings results from Goldman Sachs Group Inc.
boosted shares of investment banks in Europe and U.S. construction
data beat expectations.
The broader sentiment was, however, mostly downbeat as concerns
about global growth remained in the spotlight after Germany's ZEW
index missed expectations.
The Stoxx Europe 600 index shed 0.2% to 289.84, adding to a 0.7%
loss from Monday.
"Relatively weak economic data from Europe has largely been
shrugged off and strong corporate earnings and strong housing data
have led the market to recover off the overnight lows," said Atif
Latif, director of trading at Guardian Stockbrokers.
"Given that earnings remain robust and forward-looking guidance
encouraging we see nothing more than the market remaining in the
lower range of the uptrend," he added.
Major financial institutions put in solid performances after
investment-bank heavyweight Goldman Sachs (GS) reported
first-quarter profit ahead of expectations. Shares of ING Groep NV
(ING) gained 3.6%, UBS AG (UBS) put on 1.2% and Credit Suisse Group
AG (CS) added 0.6%.
Other news from the U.S. also helped European stock markets trim
losses, as data showed housing starts in March rose 7% to a
seasonally adjusted annual rate of 1.04 million, the highest rate
since June 2008.
Additionally, industrial production rose a better-than-expected
0.4% in March.
U.S. stocks opened higher on Wall Street, rebounding from the
worst performance in five months seen on Monday, when gold prices
slumped the most since the early 1980s.
European stock markets earlier in the day traded in deeper red
territory as the German ZEW economic sentiment indicator fell to a
lower-than-expected 36.3 level in April from 46.5 a month earlier.
The index, which measures investors' expectations for the coming
six months, was forecast to fall to 43.0.
The disappointing report added to worries over recent
macroeconomic data pointing to a slowdown in the global economic
recovery. On Monday, China posted first-quarter
gross-domestic-product growth below expectations and the New York
Fed's Empire State index fell to the slowest reading since
January.
Asia stocks closed lower on Tuesday.
Back in Europe, mining firms moved higher, rebounding after a
broad-based selloff the prior day triggered by the weak Chinese
data and large declines in metals prices. Fresnillo PLC gained
6.4%, Eurasian Natural Resources Corp. added 5.5% and Rio Tinto PLC
(RIO) picked up 1.2%. Metals prices were mostly higher.
Shares Glencore International PLC (GLCNF) gained 2.9% and
Xstrata PLC jumped 3.8%, after Chinese authorities cleared a merger
between the two mining firms.
"The sell off from yesterday was overdone on the back of
aggressive gold selling and positive news from Xstrata/Glencore has
helped money flow back into risk," Latif from Guardian Stockbrokers
said.
"Valuations still remain at the lower end of historical ranges
and we are encouraged by buy-side volume on down days that continue
to push the market higher," he added.
The U.K.'s FTSE 100 index, however, declined 0.2% to 6,331.11,
pressured by Associated British Foods PLC shaving off 1.3%, after
Credit Suisse cut the firm to neutral from outperform.
Among other major decliners, shares of LVMH Moët Hennessy Louis
Vuitton dropped 2.4% in Paris, after the luxury retailer posted
sluggish sales growth at its main fashion and leather goods
businesses.
On a more upbeat note in France, Danone SA climbed 3.6%, as the
yogurt maker said sales in the Asia-Pacific, Latin America, Middle
East and Africa regions offset weakness in the European market.
France's CAC 40 index added 0.1% to 3,713.50.
Germany's DAX 30 index gained 0.1% to 7,721.32.
Outside the major indexes, Akzo Nobel NV climbed 1.1%, after ING
lifted the paints and coatings firm to buy from hold, citing the
potential for "perfect tailwinds" in 2013 and 2014 to bring
positive earnings surprises.
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