European stocks up, but off earlier highs; DAX gains 0.9%

Forexpros - European stock markets were broadly higher on Monday, but off the session highs as better-than-expected Japanese economic data helped ease fears over the global economic outlook, however worries over the euro zone's debt crisis continued to weigh.

During European morning trade, the EURO STOXX 50 rose 0.4%, France's CAC 40 advanced 0.3%, while Germany's DAX 30 jumped 0.9%.

Preliminary data released earlier in the day showed that Japan's economy contracted less-than-expected in the second quarter, signaling the country is rebounding from March's earthquake disaster at a faster rate than expected.

Japan's gross domestic shrank by 0.3% in the second quarter, or 1.3% on an annualized basis. Analysts had expected Japan's economy to contract by 0.9% in the quarter, or 2.5% on an annualized basis.

Meanwhile, shares in beaten-up French lenders continued to recover from steep declines last week.

Societe Generale shares climbed 1.45%, while Credit Agricole rose 1.35%, as markets awaited Tuesday's meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

Italian bank stocks also performed strongly after the country's government approved EUR45.5 billon in deficit cuts in an effort to balance the budget and regain investor confidence.

Unicredit shares rallied 5.6%, while Intesa Sanpaolo traded up 3.2%.

On the downside, clothing retailer Hennes & Mauritz saw shares slump 1.75% after it said same-store sales in July fell by 6% from a year earlier.

In London, the commodity-heavy FTSE 100 rose 0.4% as shares in raw material producers led gains, as concerns over a slowdown in global demand eased.

Mining giants BHP Billiton and Rio Tinto saw shares climb 1.35% and 1% respectively, copper producer Kazakhmys surged 2.6%, while oil major British Petroleum saw shares advance 1.85%.

Shares in recruitment firm Michael Page International plunged 12.8% after reporting a 26% drop in first half profit.

Meanwhile, the outlook for U.S. equity markets was upbeat ahead of earnings reports from the second largest U.S. hardware chain Lowe's, foodservice distributor Sysco, as well as clothing retailer Urban Outfitters.

The Dow Jones Industrial Average futures pointed to a gain of 0.5%, the S&P 500 futures added 0.45%, while the Nasdaq 100 futures rose 0.25%.

Later in the day, the U.S. was to produce official data on manufacturing activity in New York State and a report on the balance of domestic and foreign investment in the U.S.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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