By Sara Sjolin and Barbara Kollmeyer, MarketWatch
LONDON (MarketWatch) -- European stock markets moved higher on
Monday, lifted by HSBC Holdings PLC after the heavyweight bank
posted results, while the broader market welcomed encouraging data
on euro-zone factory activity.
Airline and travel stocks were among the biggest losers, after
Ryanair Holdings PLC cut its outlook and warned of falling
fares.
The Stoxx Europe 600 index rose 0.3% to close at 322.50,
extending gains seen last week, when the benchmark scored its
fourth weekly advance in a row.
U.S. stocks traded mostly higher on Wall Street.
"If you look at momentum indicators, they are starting to look a
bit overbought and the upside potential is beginning to become
limited. Markets have been pushing consistently higher and at some
stage we'll see a correction or at least a consolidation," said
Richard Perry, chief market strategist at Central Markets in
London. "But it'll just be a near-term correction and markets
should push higher into the new year, with the Fed looking unlikely
to taper until next year," he added.
Banks helped support the main Europe index, with HSBC (HBC) up
2.3% after posting a 28% rise in third-quarter profit. The gain
helped lift the U.K.'s FTSE 100 index 0.4% to 6,763.62.
Shares of Ryanair led the decliners list, tumbling 13% after the
Irish-based budget airline cut its full-year guidance due to a dip
in average fares. Ryanair said it expects fares to fall by a
further 9% in the third quarter and by up to 10% in the fourth
quarter.
The news rippled through the sector, with EasyJet PLC losing
5.1%, Thomas Cook Group PLC down 3.5% and Air France-KLM SA
dropping 1.6%.
Shares of Weir Group PLC fell 3.7% after the engineering company
cut its 2013 revenue expectations due to further project-delivery
delays and industrial unrest in South Africa.
Euro-zone and China PMI
More broadly, investors welcomed data that showed euro-zone
factory activity edged higher in October, thanks to modest strength
in Germany and other northern economies. The Markit manufacturing
purchasing managers' index for the currency bloc rose to 51.3 from
51.1 in September, above the 50 threshold that separates expansion
from contraction. The reading was unchanged from an earlier
estimate.
"More encouraging indications about the recovery can be gained
by looking at the increasingly broad-based nature of the upturn,
and especially the fact that increasingly robust gains in
production are now being seen in countries such as Spain, Italy and
Ireland, to suggest that structural reforms to boost
competitiveness are starting to pay off," said Chris Williamson,
chief economist at Markit.
PMIs were also in the spotlight in China, where the country's
official non-manufacturing purchasing managers' index rose to 56.3
in October, marking a 14-month high.
Some miners pushed higher after the data, as China is a big user
of natural resources. Shares of Rio Tinto PLC (RIO) rose 3.3%, and
shares of BHP Billiton PLC (BHP) gained 1.6%. Metals prices were
mostly higher.
Among other notable movers, shares of PostNL NV jumped 7.8%
after the Dutch mail firm lifted its full-year outlook.
Shares of K+S AG rallied 9.3% after HSBC lifted the potash maker
to neutral from underweight and Commerzbank raised its rating to
hold from reduce.
Fuchs Petrolub SE jumped 5.8% after the lubricant manufacturer
confirmed its full-year outlook and said earnings before interest
and taxes climbed 5.8% in the third quarter.
Credit Suisse Group AG (CS) slumped 6.7% and UBS AG (UBS) slid
5.3% on fears Swiss law makers will push ahead and impose stricter
rules on the banks to curb borrowing, which would force the
institutions to hold more capital than international rivals.
The German DAX 30 index rose 0.3% to 9,037.23, while the French
CAC 40 index added 0.4% to 4,288.59.
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