European stock markets closed higher yesterday, extending a technical rebound after a strong debut by Swiss commodities giant Glencore.
Dealers said Glencore’s float boosted confidence in resource stocks after a sharp sector correction earlier this month on fears a slower growth outlook meant their sustained gains were overdone.
At the same time, the markets were off their highs for the day after a mixed set of US economic data made for a muted start on Wall Street, reflecting continued caution as the US economy struggles for momentum, they said.
In London, the FTSE 100 index of leading shares closed up 0.55 per cent at 5,955.99 points. In Frankfurt, the DAX rose 0.75 per cent to 7,358.23 points and in Paris the CAC 40 gained 1.25 per cent to 4,027.74 points.
“European indices continued to trade higher for a second successive session ... led by continued confidence in resources stocks,” analyst Joshua Raymond at financial spread-betting firm City Index in London.
“Weaker-than-expected data out of the US did however give a sour taste,” he added. Glencore, the world’s biggest commodities trader by revenue, raised $10 billion (€7.0 billion) through an initial public offering set at 530 pence per share, valuing the company at just under $60 billion.
“Glencore’s offer has seen substantial interest from investors around the world and was significantly oversubscribed ... providing Glencore with a high quality, diverse and geographically spread investor base,” said Ivan Glasenberg, Glencore chief executive officer.
The stock attracted strong early interest, jumping to 548 pence shortly after the market opened before closing at 538 pence for a 1.5 per cent gain.
Full official trading in the shares will begin on May 24 in London and May 25 in Hong Kong.
Arnaud de Champvallier at Turgot Asset Management in Paris said a rise in oil prices helped the commodities stocks while strong debuts by Glencore in London and LinkedIn in New York provided support.
In New York, the blue-chip the Dow Jones Industrial Average was up just 0.09 per cent at around 1615 GMT while the tech-heavy Nasdaq Composite added 0.04 per cent.
Dealers there said investors faced disappointing economic data, with weekly jobless claims falling for a second consecutive week but still remaining high at 409,000 in the week ending May 14, compared with forecasts for 420,000.The markets want to see the level below 400,000 to be reassured that the economy is generating enough new jobs.
Additionally, existing home sales were poor, the Federal Reserve’s Philadelphia regional manufacturing index dropped and the Conference Board’s leading economic indicators index fell for the first time since June 2010.
Elsewhere in Europe, Amsterdam gained 0.50 per cent, Brussels rose 0.60 per cent, Madrid was up 0.32 per cent, Milan added 0.54 per cent and Swiss stocks put on 0.35 per cent.
In Asian trade earlier Thursday, Tokyo lost 0.43 per cent after data showed the Japanese economy back in recession following the devastating March earthquake. Hong Kong rose 0.66 per cent and Shanghai fell 0.46 per cent.