By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Car makers helped lift European stock
markets on Tuesday after upbeat data on the auto industry, with
investors largely shrugging off weaker-than-expected German
investor confidence data.
The Stoxx Europe 600 index rose 0.3% to 346.41, after losing
0.5% in the prior session amid escalating violence in Iraq from
Sunni militants. Read: Obama to deploy 275 combat-ready troops to
Iraq
Car makers posted some of the biggest gains in the index after
data showed the European auto industry continued to recover in May
for a ninth straight month, although car registrations grew at the
slowest pace in six months. In Paris, Renault SA --whose group
sales jumped 19% last month--put on 1.1%, while Peugeot SA advanced
1.2%.
And in Frankfurt, shares of Daimler AG gained 0.8% and
Volkswagen AG climbed 0.6%.
German investor-confidence data, however, weren't as upbeat. The
ZEW economic sentiment indicator dropped to 29.8 points in June
from 33.1 points in May, marking a sixth straight month of
declines. Consensus was for a 35 reading.
The assessment of the current economic situation in Germany was
more optimistic, rising by 5.6 points to 67.7 points.
Germany's DAX 30 index traded 0.5% higher at 9,930.45, buoyed by
the bench mark's car makers. Siemens AG (SIEGY) also rose, up 0.6%
after the industrial conglomerate just before the close on Monday
said it had officially bid to buy the gas turbine business of
French rival Alstom SA . The bid from Siemens and partner
Mitsubishi Heavy |Industries Ltd. values Alstom at EUR14.2 billion
($19.25 billion), according to Dow Jones Newswires.
Alstom shares dropped 1.3% on Tuesday.
France's CAC 40 index added 0.3% to 4,521.87, while the U.K.'s
FTSE 100 index advanced 0.2% to 6,764.38.
The investing mood in the U.K. was partly lifted by
weaker-than-expected inflation data, which eased pressure on the
Bank of England to hike interest rates. Inflation fell to 1.5% in
May from 1.8% in April, missing consensus estimates of a 1.7%-1.8%
print. The pound (GBPUSD) slipped after the data, trading at
$1.6976, down from $1.6983 late Monday.
"It will go some way to abating the aggressive calls for a rate
hike from the Bank of England this year," said Alex Edwards, head
of the corporate desk at UKForex, in a note.
BOE Governor Mark Carney last Thursday said the first
interest-rate hike could come sooner than markets currently expect,
triggering several banks to change their expectations for a rate
increase by the end of this year.
On Wednesday, the Monetary Policy Committee releases minutes
from the June meeting, which will be closely scrutinized for other
clues on monetary tightening.
Among notable stock movers in London, shares of Whitbread PLC
added 2.9% after the hotel and restaurant operator reported a 6.9%
rise in first-quarter comparable sales, boosted by strong customer
demand at both its Premier Inn and Costa Coffee divisions
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