It was Monday Blues in European markets after weak economic data from China released over the weekend added to investor woes brought about by Wall Street falling to its lowest in a month. The Whit Monday holiday has dampened trading volumes.
The typically more China-sensitive basic resource sector outperformed despite the weaker data from China. Not for the first time, investors opted for stimulus over growth, taking heart from a statement by China’s central bank that it has the power to cushion any softness in the economy. The PBOC backed up its words with action, pumping 25bn yuan into the system through reverse repos.
Goldman Sachs) upping its oil forecast helped oil prices make new six-month highs, lifting the shares of BP (LON:BP) and Royal Dutch Shell (LON:RDSa). Brent crude is now a whisker away from $50 per barrel. Sentiment within the industry is also showing signs of renewed confidence. BP announced it is doubling its stake in the Culzean field in the North Sea.
Automakers are under the spotlight. South Korea is accusingNissan Motor Co., Ltd. (T:7201) of emissions cheating, days after the Japanese carmaker took a stake in Mitsubishi Motors (T:7211), shares of which have been clobbered because of its own emissions cheating. If Nissan is about to get embroiled in its own emissions storm, it will make the company’s planned turnaround of Mitsubishi Motors next-to-impossible. Norway’s powerful sovereign wealth fund will join the list of investors and regulators suing Volkswagen (DE:VOWG_p) over the use of emissions cheat devices in its vehicles.
British Land (LON:BLND) shares dipped to 2 ½ week lows after offering a cautious outlook as it reported an 11% increase in assets in the last twelve months. Amid signs of a slowdown in the commercial property market, Chief Executive Chris Grigg appeared to emphasise the defensive qualities of British Land such as its quality portfolio, flexible development pipeline and robust financial position.
US stocks look set to rebound from Friday’s sell-off with a slightly higher open with little in the way of notable earnings reports.
USA pre-opening levels
S&P 500: 3 points higher at 2,049
Dow Jones: 25 points higher at 17,560
Nasdaq 100: 4 points higher at 4,330
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