European stocks indices tread water after yesterday 8217 s surge

European stock indices treaded water on Wednesday after yesterday’s strong gains as traders eyed the Greece situation and the beginning of an intense few days of economic data releases.

The FTSE 100, DAX and CAC all traded largely flat on the day within tight trading ranges. The FTSE 100 would actually have been in positive territory were it not for stocks such as Marks and Spencer’s and Vodafone going ex-dividend this morning, which has taken 16 points off the UK index.

The weaker-than-expected reading of Chinese PMI data early this morning is naturally going to remind investors of their concerns about a slowdown of growth in China on the back of a stricter monetary policy. Chinese Purchasing Manager’s Index for May fell to 52 from 52.9 in April, a marginally sharper fall than the 52.2 reading the market had expected. It was however the 27th month in a row reading of expansion (a reading above 50) and whilst naturally there are concerns regarding monetary policy implications on metal demand, a 1% gain in the mining sector today appears to quash those concerns in the near term.

Economic data now in focusToday marks the start of an intensive three days of economic data releases, beginning with this afternoon’s ADP employment figures and culminating in Friday’s traditional non-farm payrolls. Naturally therefore traders are starting to turn their eye heavily towards the economic calendar and as such, this is limiting the amount of investments seen in the financial markets today. Should we get a strong reading in this afternoon’s ADP jobs report, it could convince traders that Friday’s non-farms may also be strong and this in turn could induce some speculative trades in the run up to Friday.

In terms of the individual stock movers, we have shares of Unilever rallying near 1% this morning after a report in the Daily Mail that the firm maybe a bid target for US peer Proctor and Gamble. In truth, this is not the first time Unilever has been highlighted as a bid target over the years and certainly should a bid emerge from P&G, there is likely to be an anti competition issue. That said, the news is helping to give the firm’s share price a lift this morning.

Earnings from Wolseley came in line with market expectations and after yesterday’s strong gains in the run up to today’s results, its shares have traded marginally lower as a result. Results for Northumbrian Water came in just above market expectations, with profits before tax rising 6% to £181 million. The firm’s shares fell 2p however, after Evolution Securities cut its guidance on the stock to reduce.

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