European Markets Held On To Modest Gains After U.S. Reports

(RTTNews) - The European markets began the new trading week in positive territory. The markets got off to a good start, thanks to the second quarter GDP report from China, which was in line with expectations. The markets were able to hold on to modest gains, despite the weaker than expected U.S. retail sales report. Banks were among the best performing stocks on Monday.

China's economic growth slowed in the second quarter amid weaker industrial production and investment growth, the latest figures from the National Bureau of Statistics revealed Monday. The gross domestic product rose 7.5 percent year-on-year in the second quarter, in line with expectations. This was slower than the 7.7 percent growth recorded in the first three months. In the first half of the year, GDP rose 7.6 percent compared with the same period last year.

The UK economy will likely grow faster than previously forecast in the coming years as consumers are shifting their focus to spending from saving driven by optimism gained from new government initiatives to boost the economy, a new report from the Ernst & Young Item Club showed Monday.

The gross domestic product will grow 1.1 percent this year, according to Item Club's latest summer forecast. This is stronger than April's forecast of 0.6 percent growth. Growth is then expected to accelerate to 2.2 percent in 2014, compared with previous prediction of 1.9 percent.

The GDP outlook for 2015 was raised to 2.6 percent from 2.5 percent projected in the Spring forecast. Growth may stay at around that level through to 2017, the London-based group said in the report.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.37 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.28 percent.

The DAX of Germany climbed by 0.27 percent and the CAC 40 of France advanced by 0.61 percent. The FTSE 100 of the U.K. rose by 0.59 percent and the SMI of Switzerland gained 0.20 percent.

In Frankfurt, Commerzbank gained 4.59 percent and Deutsche Bank added 1.08 percent. Wells Fargo & Co. has agreed to acquire Commerzbank's Hypothekenbank Frankfurt UK commercial real estate portfolio. The acquisition includes a $6.05 billion portfolio of commercial real estate loans.

Fresenius rose by 0.92 percent. Jefferies upgraded the stock to ''Buy'' from ''Hold.''

Kabel Deutschland was downgraded to ''Neutral'' from ''Overweight'' at HSBC. The stock finished up by 0.20 percent.

STRATEC Biomedical sank by 6.05 percent, after Kepler Cheuvreux downgraded the stock to ''Reduce'' from ''Hold.''

In Paris, Carrefour increased by 1.84 percent. Barclays upgraded the grocery retailer to ''Overweight'' from ''Equalweight.''

Air France-KLM fell by 0.29 percent, after HSBC downgraded the stock to ''Neutral'' from ''Overweight.''

Societe Generale finished with a gain of 1.40 percent. BNP Paribas rose by 0.95 percent and Credit Agricole added 0.52 percent.

In London, Royal Bank of Scotland increased by 5.12 percent. Lloyds banking advanced by 2.52 percent and Barclays added 1.18 percent.

Drugmaker AstraZeneca said its Chief Financial Officer and Executive Director Simon Lowth would leave the company at the end of October, as he is joining energy firm BG Group as finance chief. BG advanced by 0.64 percent, while AstraZeneca lost 0.15 percent.

Thorntons dropped by 6.70 percent, after reporting fourth-quarter sales figures.

Kuehne & Nagel climbed by 2.00 percent in Zurich. The logistics firm reported higher profit and revenue for the second quarter.

The number of employees in the German manufacturing sector increased modestly in May, preliminary data released by the Federal Statistical Office showed Monday. The number of persons employed in manufacturing units with 50 or more employees, increased 0.6 percent on an annual basis to 5.2 million in May.

The average asking price for a house in the United Kingdom was up 0.3 percent on month in July, property tracking website Rightmove said on Monday - slowing from the 1.2 percent increase in June. On a yearly basis, prices jumped 4.8 percent, accelerating from the 2.7 percent gain in the previous month.

Retail sales in the U.S. rose by much less than anticipated in the month of June, according to a report released by the Commerce Department on Monday. The report said retail sales increased by 0.4 percent in June compared to a downwardly revised 0.5 percent increase in May.

Economists had been expecting retail sales to rise by 0.8 percent compared to the 0.6 percent growth originally reported for the previous month.

Conditions for New York manufacturers have continued to improve modestly in July, the Federal Reserve Bank of New York revealed in a report on Monday, with the index of regional manufacturing activity showing an unexpected increase for the month.

The New York Fed said its general business conditions index rose to 9.5 in July from 7.8 in June, with a positive reading indicating an increase in regional manufacturing activity. The increase surprised economists, who had been expecting the index to drop to 5.0.

Business inventories in the U.S. unexpectedly saw a modest increase in the month of May, according to a report released by the Commerce Department on Monday. The report said business inventories inched up by 0.1 percent in May following a downwardly revised 0.2 percent increase in April.

Economists had expected inventories to come in unchanged compared to the 0.3 percent increase originally reported for the previous month.