European, Asian Stocks Rise as Fed Sees Little Inflation Risk

LONDON (The Deal) -- European and Asian markets mainly edged higher Thursday, reassured by U.S. central bankers' lack of concern about an inflation risk in the world's-largest economy and fresh signs of a robust recovery in the 18-nation euro area.

In London, the FTSE 100 rose 0.06% to 6,825.19, while the DAX in Frankfurt advanced 0.12% to 9.709.55. In France, the CAC 40 fell 0.19% to 4,460.64.

Investors were largely in a buying mood a day after minutes released from the Federal Open Market Committee's last meeting showed that central bankers expect inflation in the U.S. to remain below their 2% long-term target.

In Europe on Thursday, the eurozone composite Purchasing Managers' Index published by Markit Economics was at 53.9 in May, little changed from 54 in April, putting the region on course for its best quarter in three years. An increase in the survey's measure of new orders to its highest level since 2011 bodes well for further resilient growth of business activity in June, the report said.

Top gainers in Europe included Austria's Raiffeisen Bank. The stock rose 4.56% in Vienna after the lender reported a 2.5% rise in first-quarter net profit to 161 million euros ($220 million), which was above expectations. But it remains cautious for the coming year, saying that it expects loans and advances to customers to remain at the "approximate level" of the previous year.

Raiffeisen, which makes most of its profit in the former Soviet Union, anticipates a net provisioning requirement of between 1.3 billion and 1.4 billion euros in 2014, but said that results may be impacted by the European Central Bank's ongoing asset quality review and a further deterioration of the situation in Ukraine and Russia.

In London, Royal Mail fell 6.70% after the U.K. postal service reported its first full-year results since going public last year. Full-year pretax profit excluding some items amounted to 363 million pounds ($613 million), up from 30 million pounds, but below expectations of 406 million pounds in a Bloomberg News survey. Looking ahead, the company said it faces increasing challenges in the parcels and letters markets in the U.K., but will focus on margin expansion and underlying free cash flow growth in 2014-2015.

In France, shares in French media giant Vivendi added 0.37% to 19.05 euros, putting its yearly gain to 22.14%. Vivendi company announced plans to sell nearly half of its remaining 12% stake in Santa-Monica, Calif.-based video games maker Activision Blizzard (ATVI), in an offering valued at around $866 million based on Activision's Wednesday's close of $20.87 in New York. Last year Vivendi sold a 49.1% stake in Activision back to the company and a consortium of investors led by Activision CEO Bobby Kotick.

The latest sell-down will bring Vivendi closer to its goal of becoming a pure-play media company. Last week Vivendi completed the 4.14 billion euros sale of its majority stake in Maroc Telecom SA, and it's aiming to complete a 17 billion euros deal for its French mobile operation by year's end.

Asian markets were also up. In Tokyo, the Nikkei rose 2.11% to 296, while in Hong Kong the Hang Seng gained 0.51% to 117.24.

Asian stocks posted gains for the first time in five days after a preliminary China purchasing managers' index from HSBC Holdings plc and Markit Economics rose to a five-month high in May.

The monthly figure was a greater-than-expected 49.7, up from 48.1 in April. HSBC economists said that signs of stabilization are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs. However, they cautioned of downside risks to growth, especially as the property market cools down.

Later Thursday investors will be watching for the weekly jobless claims figures from Washington, as well as a report expected to show a rise in annual home sales in the U.S. in April.

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