Bright economic data shine on Europe stocks
May 13 2016 10:39 PM
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Traders chat in the trading room of the Frankfurt Stock Exchange. Frankfurt stocks won 0.9% to touch 9,952.90 points yesterday.

AFP/London

A raft of upbeat economic data helped push up European equity markets yesterday, with London overcoming a dire Brexit warning from the IMF.
Frankfurt stocks won 0.9% to touch 9,952.90 points as data showed that the German economy grew by a better-than-expected 0.7% in the first quarter of this year.
Paris advanced by 0.6% to 4,319.99 points in value, aided also by separate figures showing the 19-member eurozone economy grew 0.5% in the same period.
London also managed a gain of 0.6% to 6,138.5points despite poor British construction data and after the International Monetary Fund warned again of “significant downside risks” from Britain’s potential EU exit.
Markets in Europe had flatlined for most of the day but won a partial boost in afternoon deals from bright economic data in the US.
US consumers came back to stores in April, spending more than expected to reverse a worrisome stall in the first quarter of the year, Commerce Department data showed yesterday.
But with April’s gains mostly in auto sales and gasoline — the latter due to rising prices — the data in other categories was still not as robust as hoped.
Retail sales, including food services, jumped 1.3% from March, to $453.4bn, and were up 3.0% from a year ago. Analysts had expected a 0.8% rebound from March.
“The overall market sentiment has slightly changed towards positive since the release of the latest US economic data,” said Markus Huber, trader at City of London Markets.
Wall Street didn’t get much of a boost, however, with the Dow down 0.08% approaching midday, as earnings from two major retailers were seen as disappointing.
“US stocks are lower in early action, though they have pared losses in the wake of a stronger-than-expected April domestic retail sales report, which is partially offsetting a decline in crude oil prices and more lackluster results from the retail sector, courtesy of results from J.C. Penney and Nordstrom,” said analysts at brokerage Charles Schwab.
Nordstrom reported a 64% drop in first-quarter earnings to $46mn, while Penney saw comparable sales fall 0.4% during the period, sustaining a trend of weak retail earnings.
Nordstrom shares plunged nearly 15% in early trade but had cut the loss to around 11% by late morning.
Meanwhile, Penney lost 5.1% at the open but was showing a gain of 1.7% in late morning trade.
While London slipped into the red for much of the day, as the IMF warned that Britain’s potential departure from the European Union posed a “significant downside risk” to the economic outlook, it climbed back in late afternoon trading.




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