GLOBAL MARKETS-Subdued Ifo takes M&A shine off European stocks

Tue Jun 24, 2014 4:46am EDT

* Share, currency, bond markets struggle for direction
    * Signs of weakness in Europe offset more buoyant data
elsewhere
    * Oil eases after strong Iraqi export data

    By Jamie McGeever
    LONDON, June 24 (Reuters) - European stocks and major
currency and bond markets struggled for direction on Tuesday,
underpinned by manufacturing data from China, Japan and the
United States the previous day but unnerved by growing signs of
economic weakness in Europe.
    Germany's Ifo index of business sentiment fell more than
expected in June, eating into gains across Europe's major stock
markets that had been racked up on merger and acquisition talk.
 
    Crude prices pushed deeper into the red as the Ifo's signal
of moderating activity in Europe's largest economy dovetailed
with figures on Monday that showed oil supplies from Iraq
unaffected by the Sunni Islamist insurgency there.
    In early trade the FTSEurofirst 300 index of leading shares
was up 0.1 percent at 1390 points, Germany's DAX was up
0.1 percent at 9935 points and France's CAC 40 
was up 0.3 percent at 4529 points.
    Britain's FTSE 100 was flat at 6799 points.
    Agrochemicals company Syngenta surged as much as
6.5 percent on a media report that peer Monsanto had
considered buying it in a deal worth $40 billion. At 0831 GMT
Syngenta was up 4.5 percent, far and away the biggest gainer
among Europe's leading shares.
    "Our outlook for equity markets for the remainder of the
year is positive. M&A has made a welcome return in recent
months," said Mark Burgess, chief investment officer at
Threadneedle Investments.
    But the Ifo data put a lid on gains.
    "The German Ifo data was very disappointing. Yes, it is a
lagging indicator, but this is the third number in a row which
is skewed towards the downside, clouding investors' confidence,"
said Naeem Aslam at online trading platform AvaTrade.
    Close attention was also being paid to Bank of England
governor Mark Carney's testimony to parliament, which started at
 0830 GMT. He is likely to be grilled by lawmakers on his
surprise statement earlier this month that UK interest rate
could go up later this year. 
    Earlier in Asia, the majority of markets edged ahead after a
sluggish start, and the MSCI's broadest index of Asia-Pacific
shares outside Japan rose 0.3 percent. Japan's
Nikkei added a slender 0.05 percent.
    
    OIL EASES BACK
    Major currencies were flat. The euro was at $1.3607,
the dollar was at 101.98 yen and sterling was at $1.7025
.
    That left the dollar index little changed at 80.255,
well within the narrow 80.000-81.000 range seen since May.
    The Australian dollar was down 0.2 percent at $0.9402
, having touched a three-month peak overnight.
    There was more life in commodity markets, where oil eased
from recent nine-month highs after data on Monday showed that
Iraq's oil exports neared record levels in June despite the
Sunni Islamist insurgency sweeping through the country.
    Brent crude oil futures dipped below $114 a barrel,
down 0.4 percent on the day and on track for the third straight
day of decline, something not seen for a month.
    U.S. oil futures were down 0.4 percent at $105.80 a
barrel.
    "The supply news isn't really supporting oil prices. The
only thing supporting them is the fear factor," said Carsten
Fritsch, an oil analyst at Commerzbank in Frankfurt.
    Spot gold was down slightly on the day at $1,315.80
an ounce as the market consolidated last week's 3 percent jump. 
    U.S. Treasury bonds edged higher, pushing the 10-year
benchmark yield down a basis point to 2.61 percent. 

 (Reporting by Jamie McGeever, additional reporting by Sudip
Kar-Gupta; Editing by John Stonestreet; To read Reuters Global
Investing Blog click here;
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