European Markets Rallied Higher After Retail Sales Topped Expectations

(RTTNews) - The European markets ended Thursday's session in positive territory, building on the gains of the previous session. Global equity markets are attempting to recover from the sharp sell-off at the beginning of the week. The continued stabilization of oil prices provided a boost to the European markets, as well as the increase in Eurozone retail sales.

Eurozone retail sales grew more-than-expected in November, at the same rate as in the previous month, preliminary data from Eurostat showed Thursday. Retail sales rose 0.6 percent from October, when they grew the same, revised from 0.4 percent. Economists had expected a modest gain of 0.2 percent.

Eurozone economic confidence remained stable at the end of the year as the strength in consumer, retail and services confidence outweighed worsening industrial sentiment, the results of a monthly survey by the European Commission showed Thursday.

The economic sentiment index came in at 100.7 in December, the same score as seen in October and November. It was expected to rise to 101.2.

Eurozone producer prices decreased more than expected in November on a sharp fall in energy prices, data from Eurostat revealed Thursday. Producer prices dropped 1.6 percent year-on-year in November, faster than the 1.3 percent decrease in October. Economists had forecast prices to decline 1.4 percent.

German factory orders declined more-than-expected in November on a sharp contraction in domestic demand signaling weak economic activity in the largest euro area economy. Factory orders declined 2.4 percent month-on-month, reversing a revised 2.9 percent rise in October, Destatis said Thursday. Orders were expected to fall by 0.8 percent. This was the first drop in demand in three months.

The Bank of England kept its key interest rate at a record low once again at the start of the year amid growing concerns about inflation falling below 1 percent in months ahead.

The Monetary Policy Committee, governed by Mark Carney, decided to hold the key bank rate at 0.50 percent and the size of asset purchases at GBP 375 billion at the end of the two-day rate setting meeting on Thursday.

That was in line with economists' expectations. The interest rate has been at a record low since early 2009 and is expected to remain so at least until the final quarter of 2015 as lower oil prices feed into inflation.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 3.61 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 3.11 percent.

The DAX of Germany climbed by 3.36 percent and the CAC 40 of France rose by 3.59 percent. The FTSE 100 of the U.K. advanced by 2.36 percent and the SMI of Switzerland gained 2.68 percent.

In Frankfurt, SAP finished up by 2.10 percent. UBS downgraded its rating on the stock to "Neutral" from "Buy."

Bayer advanced by 5.48 percent and Merck KGaA added 1.75 percent.

Commerzbank rose by 1.86 percent and Deutsche Bank gained 1.93 percent.

In Paris, Schneider Electric climbed 4.36 percent. Societe Generale raised Schneider Electric to "Buy" from "Hold." Pernod-Ricard also added 5.33 percent.

Air France-KLM dipped by 0.24 percent. The airline reported lower traffic and capacity for December.

Credit Agricole climbed by 2.49 percent and BNP Paribas rose by 3.40 percent. Societe Generale ended the day with a gain of 3 percent.

In London, Tesco surged by 16.65 percent. The supermarket chain reported a growth in Christmas sales at constant rates.

J Sainsbury and WM Morrison Supermarkets added 9.73 percent and 7.47 percent, respectively.

Meanwhile, Marks & Spencer, which reported a fall in quarterly sales, declined by 3.71 percent.

Standard Chartered advanced by 0.82 percent. The lender has decided to close its institutional cash equities, equity research and equity capital markets 'ECM' activities. The decision is expected to affect 200 jobs.

In Zurich, Credit Suisse finished up by 1.38 percent, following a broker downgrade at Merrill Lynch.

Investors are now looking forward to the release of the U.S. jobs report for December, which is due to be released tomorrow.

First-time claims for U.S. unemployment benefits saw a modest decrease in the week ended January 3rd, according to a report released by the Labor Department on Thursday. The report said initial jobless claims edged down to 294,000, a decrease of 4,000 from the previous week's unrevised level of 298,000. Economists had expected jobless claims to dip to 290,000.