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European stocks surge on better than forecast data

sharepriceEuropean stock benchmarks rose last week after recording first gain in May as factory output fell less than estimates this month. The Stoxx Europe 600 Index added 0.7% at 11:52 a.m. in London. The benchmark added 1.7% last week as China released steps to ease a cash crunch triggered by shadow banking. It has still lost 7.8% since Feds Chairman Ben S. Bernanke said on May 22 that the central bank could reduce stimulus program only if the U.S. economy improves in a sustainable way. The FTSE 100 index added almost 1% at 12:08 London time, and German DAX benchmark is up half a percent. Standard & Poor’s 500 Index futures rose 0.5% and the MSCI Asia Pacific Index advanced by 0.2%.

In corporate news, Nokia shares jumped 7.5% after agreeing to buy Siemens AG’s stake in their joint venture called Nokia Siemens Networks. Siemens, Europe’s largest maker of power equipment, increased 2.4% following the agreement. Pirelli & C. SpA fell by 1.1% after a report it was issued by Formula One’s ruling body, following tire explosions at the British Grand Prix yesterday.

H&M clothing retailer jumped more than 3% after the Swedish company was upgraded to a rating of “buy” from “neutral” at Bank of America. According to MarketWatch, analyst Richard Chamberlain expects the retailer to return to comparable sales growth in the second half and says its valuation is underpinned by moves to catch up with rivals in online sales.

Looking at the negative numbers, shares of Volvo AB lost more than 1% after Goldman Sachs removed the automobile manufacturer from its European conviction-buy list. Analysts estimated lower revenues from Chinese construction equipment sales, they also explained product switches and launch costs would lower Volvo’s operating leverage.

Despite French CAC 40 benchmark also grew by 0.7% at 12:08 London time, Frances automobile market shrank sharply again in June, bringing the loss in registrations of new cars to 9% for the first half of the year. French main car manufacturers association warned over a slight improvement by the end of the year.

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