European Stocks Stall as Chinese Data Curbs Enthusiasm

LONDON -- European equities have started the week on a flat to negative note Monday, putting a halt to the boost seen Friday after disappointing U.S. nonfarm-payroll numbers boosted hopes that the U.S. would implement new stimulus measures. Chinese trade data overnight hit the markets at the open, having showed that imports for the Asian powerhouse fell 2.6% in July, although this brought some hope that China would implement some new growth measures.

In Europe, peripheral countries are once again seeing some of the weakest performance, with Spain's IBEX (INDEX: ^IBEX  ) down 0.5%.

As always, the following price moves are based on this morning's European trading.

In Europe headline grabbers Glencore International (NASDAQOTH: GLNCY.PK) and Xstrata (NASDAQOTH: XSRAY.PK) are once again coming to the fore after Glencore announced it has made its final offer for the miner. The move comes as a last-ditch attempt to save the $80 billion merger after Glencore CEO Ivan Glesenberg said Friday he would increase his offer to 3.05 Glencore shares for each of Xstrata's if he could head the new company.

Today, Glencore defended this merger ratio, saying it represented a premium of 27% for a company in which Glencore already holds a 34% stake. However, Xstrata's board, which is using a different benchmark to calculate the ratio, said it actually represents only a 17.6% premium -- significantly lower than would be expected through a takeover. Today, Xstrata is trading 2.5% higher, while Glencore is down around 1%.

Elsewhere, Nokia (NYSE: NOK  ) is continuing to benefit from last week's launch of its new mobile-phone range, climbing around 1.3% today. This follows some controversy surrounding the launch: A promotional video for the new handsets included video clips and still photos that, although they suggested such, were not actually taken from the new Lumia 920 smartphone. The company today appointed an ethics officer to conduct a review of how and why this misleading material was published.

On a more negative note, Spain's Bankia (NASDAQOTH: BNKXF.PK) is down 3.4% despite its parent company, BFA, winning temporary EU approval to receive a 4.5 billion euro recapitalization from the country's banking bailout. Last month the company posted a 4.45 billion euro first-half loss, leading many to expect a recapitalization request of this kind. Today the European Commission confirmed that Spanish authorities have committed to presenting a restructuring plan in time to allow the Commission to approve it by November this year.

As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap.

If you want to know why Buffett has bought into Europe, this special Motley Fool report -- "The One European Share Warren Buffett Loves" -- reveals everything, including the price he paid. You can download the report today for free, but hurry -- the report is available for a limited time only.

The Motley Fool is helping Europe invest. Better. And with the eurozone economy so uncertain, we're urging everyone to read "10 Steps To Making A Million In The Market" -- this report may transform your wealth. Click here now to request your free, no-obligation copy.

Further Motley Fool investment opportunities:

Karl Loomes does not own any share mentioned in this article. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2011167, ~/Articles/ArticleHandler.aspx, 8/27/2014 1:19:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement