London View

Asian and European Markets Gain , Balfour Beatty Rejects Second Carrilion Overture

European stock markets rose Monday amid easing worries about geopolitical tensions in Eastern Europe after Russian media reported late last week that Russian war planes had finished exercises near the Ukraine border. There have also been some reassuring signs from Russian policymakers; over the weekend, Russian foreign minister Sergei Lavrov, in a call with US secretary of state John Kerry, said "urgent measures" were needed "for preventing an impending humanitarian catastrophe" in south-eastern Ukraine. In Europe, the Stoxx Europe 600 Index advanced 0.8% while Standard & Poor’s 500 Index futures added 0.2% and Asian markets rose overnight.

US equities rallied last Friday on easing geopolitical tensions between Ukraine and Russia. Over the weekend, the US has led air strikes against militants in Iraq while Israel and Hamas in the Gaza Strip agreed to an Egyptian-brokered truce. Over in Turkey, Recep Tayyip Erdogan beat his opponents in the country's first ever direct presidential election. Mr Erdogan, Turkey's prime minister, won 52% of the votes cast this weekend, meaning he has won the presidency outright without the need for a second round.

In Asia overnight, markets rallied across the board; Japan's Nikkei 225 led the gains, rising 2.2%. In China, stocks rose after the latest inflation data was benign, allowing the Beijing government to keep allowing credit to flow freely. Chinese consumer prices rose 2.3% year-on-year in July, lifting the Hong Kong's Hang Seng up by 1% and the Shanghai Composite up by 0.6%.

Construction firm Balfour Beatty has again rejected a merger offer from rival firm Carillion, with disagreement centring around the future of Parsons Brinckerhoff, a US subsidiary of Balfour Beatty. Both firms were up in early trading this morning, with Carillion up 1.25% and Balfour Beatty up by 1.48%.

In other UK news, a major survey released by the Broadcasters Audience Research Board claims that online streaming company Netflix has customers in over 3 million UK households – doubling its growth in a year and meaning that over 10% of UK houses are signed up to the service. This would give Netflix over twice the reach of its strongest streaming competitor in Britain – Amazon’s streaming service is estimated to have between a 4-5% percentage share. Netflix shares were up by 0.15% in pre-market trading.

Today is a light day in terms of macroeconomic announcements, with attention turning to the German ZEW survey due on Tuesday.