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European Stocks Up as Eurozone Industrial Production Rises

LONDON ( The Deal) -- European markets rose Thursday, after a report on industrial production in the 18-country eurozone boosted confidence in the economic recovery and as investors awaited the latest on U.S. retail sales and jobless claims. Asian stocks fell.

In London, the FTSE 100 rose 0.14% to 6,848.41, while the DAX in Frankfurt added 0.19% to 9,969.16. In France, the benchmark CAC 40 added 0.41% to 4,573.58.

Seasonally adjusted industrial production in the countries using the common currency rose by 0.8% in April, the strongest growth since November last year and following a 0.4% decline in March, according to figures released by Eurostat, the EU's statistics agency.

Economist Carsten Brzeski of ING Groep said that while first-quarter GDP growth was disappointing, the latest industrial production data points to a growth acceleration in the second quarter.

"The ongoing pace of the recovery and signs of low inflation suggest that the ECB [European Central Bank] probably did not act last week because it really had to but rather because it could," he added.

In London, shares in mining giant Anglo American led commodity stocks lower, shedding 3.06% to 6,847.47 pence, after Morgan Stanley issued a sell recommendation on the stock, while shares in online supermarket Ocado Group gained nearly 1.5% to 3,72.80 pence, on a new buy recommendation from JPMorgan Chase.

AstraZeneca (AZN - Get Report) rose 1.06% to 4,445.50 pence after announcing a global license agreement with Synairgen on a novel inhaled medication for treating respiratory tract infections in patients with severe asthma. The medication, referred to as SNG001, supports the immune system by correcting a deficiency that makes patients more susceptible to infections.

Under the agreement, AstraZeneca will pay Synairgen $7.25 million up front and then up to $225 million in additional milestone payments, as well as royalties from singe-digit to mid-teens on commercial sales. AstraZeneca will be responsible for future development costs.

Investors welcomed news of AstraZeneca building its pipeline, less than a month after the drug maker fended off an unwanted takeover attempt from U.S. peer Pfizer (PFE).

European IPO fever also continued, with Dubai's Shelf Drilling announcing plans to raise $500 million through an initial public offering on the London Stock Exchange. The company is backed by a trio of buyout shops, namely Castle Harlan Partners, Champ Private Equity and Lime Rock Partners.

Later Thursday, investors will be looking to two indicators out of the U.S. for fresh signs of the state of the world's largest economy.

A report from the U.S. Commerce Department is expected to show that retail purchases increased for a fourth month in May. Economists surveyed by Bloomberg News are betting that purchases rose by 0.6% last month, outpacing April's 0.1% rise.

A separate report from the U.S. Department of Labor may show first-time applications for jobless benefits decreased to 310,000 in the week ended June 7 from 312,000 the previous week.

Asian stocks fell, led by a 0.64% decline in Japan's Nikkei index to 14,974, amid expectations that Japanese central bankers would refrain from expanding stimulus in Friday's policy decision. In Hong Kong, the Hang Seng fell 0.35% to 2,275.02.

Takata fell 2.05% amid growing concern over safety problems with its airbags. On Wednesday, U.S. regulators launched an investigation into Takata-made airbags used in about 1.1 million vehicles from five Japanese automakers, while Toyota (TM) recalled 650,000 more vehicles in Japan and Takata itself warned that further fixes may be needed.

Shares in baseball stadium owner Tokyo Dome shed 3.14%, while Nintendo dropped 1.5%.

Among gainers in Tokyo, Mitsubishi Heavy Industries added 1.25%, a day after the company and Germany's Siemens (SI) announced they are teaming up in a joint bid for Alstom's energy business to counter an 11.4 billion euros ($15.4 billion) offer from General Electric (GE).

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