(Reuters) – European markets were firmer on Tuesday after an extended weekend break, bucking fears of slowing demand from China and despite debt stand-off fears depressing Greek stocks.
The pan-European FTSEurofirst 300 .FTEU3 equity index rose 0.3 percent, with UBS (UBSG.VX) shares gaining almost 7 percent after the bank reported its highest quarterly profit in nearly five years and said it was in advanced U.S. talks to settle allegations of foreign exchange market rigging.
U.S. stock index futures SPc1 were lower ahead of another round of earnings reports and after data showed the U.S. trade deficit surged to its highest level in nearly 6-1/2 years in March as imports rebounded strongly after being held down by a labour dispute at key West Coast ports.
The European Commission sent positive signals on the economy, saying euro zone economic growth would be stronger than previously expected this year thanks to cheaper oil, a weaker euro, stable global growth and supportive fiscal and monetary policies.
Britain’s FTSE 100 index .FTSE was up 0.5 percent after a three-day weekend while Germany’s DAX .GDAXI fell 0.4 percent. A fresh raft of earnings updates led to mixed trading, with Infineon up after the chip-maker lifted its annual outlook forecasts while airline Lufthansa (LHAG.DE) reined in profit expectations.
Sterling hit a ten-day low against the dollar on Tuesday after data showed growth in Britain’s construction industry slowed sharply in April, just two days before a national election that looks unlikely to hand any party an overall majority.
Greece’s debt stand-off with international creditors sent the ATG benchmark index .ATG down 4 percent. Athens stepped up diplomacy with euro zone partners to try to avert a potentially catastrophic funding crunch this month, when it must make a big debt repayment to the IMF as cash reserves dry up.
Fears of an imminent crisis pushed up low-rated euro zone bond yields and the euro eased a little against the U.S. dollar.