On 01 June, 2015 – European markets were mixed on weaker-than-expected eurozone manufacturing data

Stocks were mixed globally to begin the final month of the second quarter.
United States
Stocks advanced in afternoon trading Monday after the release of some encouraging economic data and news of a big acquisition in the semiconductor industry. The Dow Jones industrials and S&P each were up 0.2% while the Nasdaq added 0.3%. Investors continue to monitor each new US data release as they look for clues as to when the Federal Reserve may begin increasing interest rates.
Altera jumped after the chip designer agreed to be acquired by Intel for US$17 billion in cash. Intel shares, however, retreated. Bristol-Myers advanced after the FDA accepted its application for a combination melanoma treatment. Immunogen surged more, leading a rally for makers of cancer drugs after it presented positive data at a conference. Microsoft gained on the day.
Manufacturing growth accelerated in May for the first time in six months according to the ISM manufacturing index. The gain was propelled by more new orders and an increase in hiring. A separate report showed construction spending climbed in April to the highest level in more than six years.
Tensions remain high in Europe as Greece inches closer to a Friday deadline to make a debt payment to the International Monetary Fund. Greece is struggling to convince the fund and its creditors in Europe that it has a reform strategy in place so it can get access to more bailout cash. One suggestion is that Greece could roll all its IMF payments due this month into one, giving it more time to secure a deal to get the €7.2 billion remaining in its bailout fund.
Gold at the afternoon London fixing was up US$8.50 to US$1,199.90. Copper futures were down 0.4% to US$2.72. WTI spot crude was down 2 US cents to US$60.28. Dated Brent spot crude was down 58 US cents to US$64.98. The US dollar was up against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.45%. The yield on US Treasury 30 year bond was up 5 basis points to 2.93% while the yield on the 10 year note was up 6 basis points to 2.18%.
Europe
European markets were mixed after Eurozone manufacturing results were slightly weaker than expected. Investors also continued to monitor the situation in Greece after the country missed a self-imposed Sunday deadline for reaching an agreement with its creditors. Negotiations on a cash for reforms deal will begin anew this week. The FTSE lost 0.4% while both the CAC and SMI added 0.3% and the DAX 0.2%.
Bayer advanced after the company’s CropScience unit agreed to acquire SeedWorks India for undisclosed terms. The company also said its MaterialScience business would be called Covestro effective September 1. Both Fresenius and Fresenius Medical Care advanced as did Merck and Sanofi. Pernod Ricard and Orange gained. British American Tobacco declined after the company announced that it agreed to acquire TDR d.o.o. and other tobacco and retail assets from Adris Grupa for a total enterprise value of €550 million. Lloyds Banking Group gained after the British Government reduced its stake in the bank by another percentage point to 19%. Mining stocks pulled back on disappointing Chinese manufacturing data. Anglo American and Glencore retreated. AstraZeneca was down after it announced preliminary efficacy and safety data for AZD9291 in the first-line treatment of epidermal growth factor receptor mutation positive advanced non-small cell lung cancer. Roche gained as well.
Eurozone manufacturing sector continued to expand in May but the latest pace of expansion is slightly weaker than the initial estimate. The final manufacturing PMI was 52.2, matching March’s 10 month high but just below the flash estimate of 52.3. Germany’s manufacturing PMI declined to 51.1 from 52.1 in April and from the flash estimate of 51.4. French manufacturing PMI continued to contract but at a slower rate. The reading climbed to 49.4 from 48 in April. British manufacturing continued to expand at a moderate pace in May after a marked slowdown in April. The manufacturing PMI climbed to 52.0 from 51.8 in April.
Asia Pacific
Shares were mixed Monday as speculation that Beijing will continue to unveil stimulus measures offset persisting concerns about Greece’s future in the Eurozone and disappointing US data. While Chinese and Hong Kong shares led regional gains, Japanese shares ended on a flat note despite strong manufacturing and corporate spending data.
The Shanghai Composite soared 4.7% and the Hang Seng added 0.6% as mixed data reinforce views that policymakers need to add more stimulus measures in coming months to stem the slowdown in the economy. Investor sentiment was also buoyed by domestic media commentary asserting that the bull market has not yet ended. Activity in China’s manufacturing sector continued to contract in May. The manufacturing purchasing managers’ index was 49.2, matching expectations and representing a slight upward revision from the flash estimate of 49.1. The official manufacturing CFLP PMI stood at 50.2 in May, up slightly from 50.1 in April.
The Nikkei erased early losses to hit a fresh 15-year closing high amid speculation that the Bank of Japan will loosen its monetary policy. The yen hovered near 12-year lows against the dollar on talk that the Bank of Japan will increase purchases of Exchange Traded Funds to shore up the stock market. The Nikkei swung between gains and losses before closing up 6.72 points, rising for a 12th straight day, the longest winning streak since February 1988. Japanese manufacturing activity expanded in May for the first time in two months as domestic orders and output rose. The manufacturing PMI reading was 50.9, up from 49.9 in April.
Both the S&P/ASX and All Ordinaries were down 0.7% in light trading, dragged down by banking and mining stocks a day before the Reserve Bank of Australia meets to announce its rate decision. The Sensex edged up 0.1% before Tuesday’s Reserve Bank of India’s monetary policy review. The Kospi retreated 0.6%.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Both the Reserve Bank of Australia and the Reserve Bank of India will publish their respective monetary policy decisions. Germany reports its May unemployment rate. The Eurozone releases its flash May reading of the harmonized index of consumer prices and April producer price index. The US releases April factory orders.
*Note — all releases are listed in local time.