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European markets rose Monday despite an expected anemic open on Wall Street,as an upbeat statement from Barclays bank sent its shares up a stunning 53 percent and boosted investors confidence in the ailing banking sector.
Barclays surprised by releasing a statement showing it had made a good profit for 2008 and that it did not need any cash bailouts to stay in business. Markets had feared the bank would be next in line to be rescued by the state and have to give up a stake to the government. In early afternoon European trading,Britains FTSE 100 was 0.9 percent higher at 4,090.74. Frances CAC-40 gained 0.7 percent to 2,871.18,while Germany’s DAX added 0.3 percent to 4,191.58.
Futures pointed to a mixed open on Wall Street. Dow Jones futures fell 18 points to 7,955 after the index fell 0.6 percent on Friday. The Standard & Poors 500 futures added just 0.2 points to 823.70,as warnings from Caterpillar about the health of its business offset the buzz around Pfizer’s $68 billion acquisition of rival Wyeth.
In Europe,financial and energy stocks were the best-performing shares. The dust has settled after last week’s heavy losses,so we’re seeing a bit of a bounce,supported by some bargain-hunting, said Paul Chesterton,analyst at CMC Markets
Chesterton noted Goldman Sachs had upgraded oil stocks,such as BP,which helped buoy the wider indexes,but financial stocks led the charge on Barclays good news.
Dutch ING announced 7,000 job cuts,the resignation of its CEO and a euro3.3 billion ($4.22 billion) loss for the fourth quarter. But it also said the state would take on 80 percent of a euro27.7 billion portfolio of risky assets in exchange for a nominal sum. Its shares were down 4.3 percent.
In Asia,Japans Nikkei 225 closed 0.8 percent lower at 7,682.14. It was the only major market open in the region on Monday amid a slew of regional holidays. Markets in Hong Kong,mainland China,South Korea,Singapore and Taiwan were closed for the Lunar New Year holidays. Australian and Indian markets were also closed for national holidays.
In Tokyo,investors were nervous ahead of the expected flurry of dismal quarterly results and a worsening outlook,said Masayoshi Okamoto,head of dealing at Jujiya Securities in Tokyo.
Theyre hanging back and trying to figure out what to do next, he said. (Earnings) will likely be worse than anyone imagined,and investors know that the situation will deteriorate even further in the January-March quarter.
Sony Corp,which last week projected its first annual net loss in 14 years,fell 3.1 per cent and will report third quarter results on Thursday,followed by Honda Motor Co Friday.
Nomura Holdings Inc,which reports Tuesday,managed to edge up 0.5 per cent on hopes it had finished writing off costs related to its purchase of Lehman Brothers operations in Asia,Europe and the Middle East.
Australias market,closed for Australia Day,will reopen Tuesday,as will trading in India,which was observing Republic Day.
Markets in Singapore and South Korea will reopen on Wednesday.
