- US housing starts rise
- US consumer confidence falls
- European car sales slow
- ECB advised to buy bailout bonds
- US and UK threaten further Russia sanctions
FTSE 100: 0.16%
CAC 40: 0.28%
FTSE MIB: 1.12%
IBEX 35: 1.05%
Stoxx 600: 0.14%
Most European stocks ended higher as a report showed US housing starts rose by more than expected.
Housing starts increased to an annualised rate of 1.07m in April, a Commerce Department report showed, beating analysts' estimates of 980,000. The federal government revised the figure for March upward to 947,000.
"Altogether, today's report on US housing starts should help to assuage Federal Open Market Committee concerns that housing activity was flattening out as opposed to gradually recovering after successive adverse shocks from higher mortgage rates last year and adverse weather more recently," said Barclays Research.
"The report has lifted our second quarter GDP tracking estimate by two-tenths to 3.1%, while our first quarter GDP tracking estimate remains unchanged at -0.6%."
Another report showed consumer confidence unexpectedly declined in May. The preliminary reading of the Thomson Reuters/University of Michigan index of sentiment dropped to 81.8 this month from 84.1 in April. Economists had predicted a reading of 84.5.
"The fall in consumer confidence in May comes at the end of a week in which we also received weak retail sales and industrial production numbers," Capital Economics said.
"But we think that the underlying trend in economic activity is upwards, meaning that it shouldn't be long before confidence starts to climb again."
Earlier in the session, Eurostat revealed the Eurozone's trade surplus narrowed in March compared to a year earlier but rose over the prior month after exports and imports fell by 0.5% and 0.6% respectively.
The trade surplus for March totalled €17.1bn, less than the €21.9bn of a year earlier but more than February's €14.2bn. A consensus among analysts called for a milder monthly increase to €15.5bn.
Another report from Brussels-based European Automobile Manufacturer's Association (ACEA) showed car sales rose by 4.2% to 1.13m vehicles in April, the slowest pace in five months. Shares in Renault and Daimler fell following the report.
ECB urged to buy bailout bonds
European Central Bank (ECB) President Mario Draghi has been advised to buy bailout bonds and end his search for assets worth buying.
Guntram Wolff, director of the Bruegel institute in Brussels, proposed he tap a €490bn pool of debt issued by agencies that include the region's two bailout funds.
He told Bloomberg the debt issued by the bailout funds represents "the only 'European sovereign bonds,' if you wish; they'd be European assets which have European quality, and therefore would be of low risk".
"My feeling is that the ECB is still very shy. The easy thing will be to lower the deposit rate. We all know the effect of this is not very big."
US and UK diplomats have warned of further sanctions in Russia if this month's Ukrainian presidential election is undermined.
"If Russia or its proxies disrupt the elections," the US and its allies "will impose sectoral economic sanctions as a result," Secretary of State John Kerry said in London yesterday after meeting his counterparts from Britain, Italy, France and Germany.
TUI dropped as the travel company's loss before interest, taxes and amortisation widened in the second quarter.
Intertek Group declined after saying it experienced weaker-than-expected activity in the energy-infrastructure market.
Banco Espirito slumped after the Portuguese lender said that it plans to raise as much as €1.05bn in a rights offering to strengthen its capital ratios.
Bouygues SA advanced following a report that Orange SA is considering buying Bouygues Telecom. Orange also gained.
Morrison Supermarkets rallied on speculation a US led private-equity consortium may make a bid for the grocery chain, boosting other supermarket stocks including Sainsbury and Tesco.
The euro fell 0.04% to $1.3705.
Brent crude futures rose $0.782 to $109.960 per barrel, according to the ICE.