European stocks gain on economic data, pound slips

Cape Town - European stocks advanced as economic data from Germany and France signaled that the region’s recovery is on track. UK equities and bonds showed resilience in the wake of a suicide bomb attack, even as the pound slipped.

Technology companies helped spur the Stoxx Europe 600 Index after Nokia Oyj settled a litigation with Apple. The UK’s FTSE 100 Index rose a third day as S&P 500 futures also climbed.

South Africa’s rand led declines in emerging-nation currencies as a risk-off mood hit markets after a terrorist attack killed at least 22 people at a concert in Manchester. Oil dropped, halting a four-day rising streak that took the price of crude above $51 a barrel.

Confidence is building in the European economy, with data on Tuesday confirming the German economy is firing on all cylinders and France’s is gathering momentum, while a eurozone Purchasing Managers’ Index showed manufacturing in the bloc expanded at the fastest pace in more than six years.

That’s bolstering the case for investing in the region as political wrangling in Washington rumbles on, diverting attention from US President Donald Trump’s spending and tax plans.

“Europe’s growth numbers aren’t knocking the skin off the ball, but they are less volatile and it’s doing relatively well compared to the US, UK and Japan,” said Bill Blain, head of capital markets at London-based Mint Partners. “More than a few global investors have lost faith in the US recovery and Trump jump.”

The US president in March asked Director of National Intelligence Daniel Coats and NSA Director Michael Rogers to publicly deny existence of any collusion between his campaign and the Russian government, the Washington Post reported, citing unidentified current and former officials.

Here are some key upcoming events:

Next stop on Trump’s tour will be the Group of Seven and NATO meetings in Europe. Sales of US new homes in April probably held near a nine-year high, Commerce Department figures are projected to show on Tuesday.

Minutes from the last Federal Reserve policy meeting will be released on Wednesday, offering more clues to the path of interest rates. OPEC will meet in Vienna on Thursday, with major oil producers edging closer to extending an agreement to curb output. South Korea, Canada, South Africa and Thailand set interest rates this week.

And here are the main moves in markets:

Stocks 

The Stoxx Europe 600 Index gained 0.2% by 10:42. The UK’s FTSE 100 Index added 0.1%. Futures on the S&P 500 climbed 0.1% after the underlying gauge rose 0.5% on Monday. The selloff in Brazilian assets resumed on Monday. The NEXT Funds Ibovespa Linked Exchange Traded Fund, an equity ETF that tracks Brazil’s benchmark index, slumped 3.9% in Tokyo trading on Tuesday.

Currencies

The Bloomberg Dollar Spot Index was flat, trading near the lowest level since November. The yen rose 0.1% to 111.20 per dollar. The pound slid 0.1% to $1.2984 after weakening as much as 0.4%. The euro rose 0.1% to $1.1250. The rand weakened as much as 0.5%. Turkey’s lira was down 0.3%.

Bonds

The yield on 10-year Treasury notes was little changed at 2.25%. German benchmark yields slipped two basis points while those in France and the UK were little changed.

Commodities

WTI crude fell 0.7% to $50.76, after jumping above $51 per barrel on Monday. Gold rose less than 0.1% to $1 260.04 an ounce.

Asia

Japan’s Topix dropped 0.2% after swinging between gains and losses. South Korea’s Kospi rose 0.3%. Hong Kong’s Hang Seng fell 0.1%. The Shanghai Composite Index lost 0.5%.

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