Eurostoxx 50:2,850.51 (–19.68) Frankfurt DAX:7,439.44 (–3.52) Paris CAC3,978.83 (–24.28)
EUROPEAN SHARES inched higher in thin volume yesterday, rising for the seventh straight session, with French retailer Carrefour leading the gainers after listing its Spanish discount chain.
The pan-European FTSEurofirst 300 index of top shares closed 0.1 per cent higher at 1,122.23 points, hitting a one-month closing high, although moves were exaggerated by thin volumes.
Carrefour, the world’s second biggest retailer, rose 4.5 per cent after listing the Dia chain in Spain, in which each shareholder will get a stake.
Banks were lower, with the STOXX Europe 600 banking index down 0.8 per cent. French lenders including Société Générale and BNP Paribas fell further, down 1.7 and 1.3 per cent, weighed by bearish comments from Standard Poor’s on Monday about a Greek debt roll-over plan.
The Eurostoxx 50 index, the euro zone’s blue chip index, also held above its 50-day moving average, closing at 2,850.51.
“For now prices are consolidating above the next strong horizontal resistance area around 2,890 (for the Eurostoxx 50 index). This should likely be followed by a pull-back to around 2,800...before the uptrend continues,” said Roelof-Jan van den Akker, senior technical analyst at ING.
Optimism was tempered by data showing that growth in the euro zone’s services sector slowed for a third straight month in June, and by more than an initial estimate, with sluggish new orders dimming the outlook.
“The big question is whether it will go down in the second half of the year, and also whether the US ISM (non-manufacturing data) will show whether the weakness was temporary due to the Japan earthquake,” said Koen de Leus, economist at KBC Securities.
Highlighting underlying caution in the market, the Eurostoxx 50 volatility index, one of Europe’s main gauges of investor discomfort, rose 2.7 per cent. The higher the volatility index, based on sell and buy options on the Eurostoxx 50 index, the lower the market’s risk appetite.
Data this week is likely to provide direction for equities, with the US ISM non-manufacturing numbers today and the European Central Bank interest rate decision tomorrow. – (Reuters)
