Europe stocks rebound, led by Old Mutual

MADRID (MarketWatch) — European stock markets pushed higher Thursday,
stabilizing after the prior day’s rout, after a couple of purchasing
managers’ surveys were viewed positively and as Old Mutual PLC gained
after it announced the sale of its Nordic unit.







The Stoxx Europe 600 index


/quotes/zigman/2380150 XX:SXXP
+1.52%



rose 1% to 234.83.







The index fell a bit more than 2% in the prior session, the biggest
one-day percentage fall since Nov. 21, as worries about the
sovereign-debt crisis and disappointment over inaction by the U.S.
Federal Reserve after its meeting battered sentiment.









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Gold, oil drop on euro cash concern


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Christian Tegllund Blaabjerg, chief economist at FIH Erhvervsbank, said
markets were gaining on better-than-expected euro-zone and German
purchasing-manager surveys, which pointed toward ”not-that-bad GDP
numbers.”







The Markit Flash Germany Manufacturing PMI index advanced to 48.1 in
December from 47.9 in November, indicating a slight improvement.







That was followed by the Markit flash Eurozone Purchasing Managers
Index, which showed contraction for the fourth straight month in
December. The index rose to 46.9 in December from 46.4 in November.







Analysts noted an upbeat result from a Spanish bond auction, with
borrowing costs lower than in prior auctions and with the amount raised
double what was expected.







“Spain has less outstanding debt than Italy but probably a worse economy
with a massive property bubble yet to cause real havoc to either the
banking sector or consumers. However it seems that the smaller debt pile
is what investors are focusing on, for the time being,” said Louise
Cooper, market strategist with BGC Partners in emailed comments.







Shares of Spanish telecom group Telefonica SA


/quotes/zigman/206308 ES:TEF
-0.72%



fell 2% after the company said it will reduce dividends in 2012 and 2013. The Spain IBEX 35 index


/quotes/zigman/2759618 XX:IBEX
+1.36%



rose 0.8% to 8,245.






Financials in focus








For banks in Europe, Blaabjerg said the situation remains difficult as
the sovereign-debt crisis continues to weigh on sentiment.







“U.S. dollar-funding for banks is still horrible,” Blaabjerg said in
emailed comments. “The U.S. is pulling back their investments from
Europe and swapping their euros into U.S. dollars and European banks
can’t get U.S. dollar funding despite the recent price cut by Fed.”








/quotes/zigman/295440
ACA
4.08,
-0.15,
-3.55%


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10
5
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Shares of Credit Agricole SA


/quotes/zigman/295440 FR:ACA
-3.55%



fell 2.8%. Late the prior day, Fitch Ratings downgraded
investment-grade ratings on five major European commercial banks by one
notch each, with Credit Agricole among those.