European stocks headed for fourth-straight monthly win, but softer Asian data, holidays weigh

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© MarketWatch/Kollmeyer


© MarketWatch/Kollmeyer Plaza de Canelejas Near Puerta del Sol in Madrid on May 28, 2021.

European stocks were headed for the fourth straight month of gains for May, but the month was winding down on a lackluster note Monday after tepid economic news out of China and Japan.

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Market closures due to holidays in London and the U.S. also kept many investors on the sidelines.

The Stoxx Europe 600 was flat at 448.88, just under Friday’s record closing level of 448.98. For May, the index has gained around 2.5% month to date. The German DAX slipped 0.3% and the French CAC 40 rose 0.1%, and are up around 2.3% and 3.5%, respectively, for the month.

All indexes marked their fourth-straight monthly advances, similar to the Dow Jones Industrial Average and S&P 500 indexes which finished the month’s trading on Friday. The Nasdaq Composite fell for the month. U.S. stock futures indicated modest gains for Tuesday when trading resumes.

Wall Street equities booked weekly gains after data showed strength in the economy, though inflation remains a worry after the U.S. PCE inflation rate approached its highest level in nearly 13 years. This week’s batch of data will include all-important nonfarm payrolls for May.

Read: Life might feel more certain this summer, but betting on a calm stock market still could go wrong  

Overshadowing Monday’s thin action was data showing weaker retail sales in Japan, and flat Chinese manufacturing in May. The Nikkei 225 index slid 0.9%, flat on the month, while China’s CSI 300 index rose 0.2%. but ended the month with a 4% gain.

China’s official manufacturing purchasing managers index (PMI) eased in May, while nonmanufacturing PMI, which includes services and construction activity, rose modestly. Also from China came news that the southern city of Guangzhou was forced to cancel hundreds of flights after a surge in COVID-19 cases.

Elsewhere, May retail sales in Japan fell from the previous month and factory output rose above pre-pandemic levels for the first time, but came in short of expectations.

Also Monday, the Organization for Economic Cooperation and Development lifted its global economic output forecasts for 2021 thanks to vaccines and U.S. fiscal stimulus. Its U.S. growth forecast was lifted to 6.9% from 6.5%, while growth for the eurozone was boosted to 4.3% from 3.9%. and China growth was raised to 8.5% from 7.8%.

But the Paris-based research body warned that emerging countries were falling far behind. Its growth forecast for India was cut to 9.9% from 12.6%.

Among companies in focus, Assicurazioni Generali on Monday launched a 1.18 billion-euro ($1.44 billion) takeover offer for smaller peer Societa Cattolica di Assicurazione in a move to beef up its position as Italy’s largest insurer, reported Dow Jones Newswires. Shares of Assicurazioni were flat, but Societa shares surged 12%.

Shares of Kinnevik climbed 4% after the Swedish investment company said digital-health company Babylon Holdings Ltd. is exploring going public via a special-purpose acquisition company deal, reported Dow Jones Newswires. Kinnevik, which owns a 16% stake in Babylon, said Sunday that that no definitive decision has been taken to pursue any transaction.

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