On Friday European stocks advanced, led by construction companies, as investors awaited a U.S. report on first-quarter economic growth. U.S. index futures and Asian shares retreated.
Vinci SA led construction shares higher. Nobel Biocare Holding AG, the world’s second-biggest dental implant maker, rose after first-quarter profit beat analysts’ estimates.
The Stoxx 600 advanced 0.3 percent to 257.90 at 10:18 a.m. in London. On Thursday the benchmark Stoxx 600 added 0.1 percent after a rally in automakers helped offset a drop in euro-area confidence and a report showed more Americans than forecast filed for jobless benefits last week.
Spain’s sovereign credit rating was cut for the second time this year by S&P on concern that the country will have to provide further fiscal support to banks as the economy contracts. S&P lowered the long-term grade to BBB+ from A, with a negative outlook. Spain’s short-term rating was reduced to A-2 from A-1.
Meanwhile, Spanish Economy Minister Luis de Guindos expects foreign investors and real-estate funds to help offload property assets from banks’ balance sheets and ruled out using public funds to shore up the industry.
In the U.S., the biggest increase in consumer spending in a year probably helped extend the U.S. economic expansion into the first quarter, economists said before a report to be issued later during the day.
Asian stocks fell, with the regional benchmark index snapping a two-day gain, as a cut in Spain’s credit rating overshadowed Japan’s move to expand economic stimulus and corporate earnings that beat estimates. Shares of Japanese lenders gave up earlier gains as investors were disappointed with a central bank stimulus program that expanded long-term government bond purchases and cut a short-term lending facility for banks by 5 trillion yen. Japan’s Nikkei 225 Stock Average declined 0.4 percent, erasing gains of as much as 1.4 percent.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group.
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