European Shares May See Cautious Gains At Open Before Key Inflation Data

(RTTNews) - European stocks may see modest gains at open on Friday amid signs that the U.S. economy remains stronger than feared.

Asian stocks traded mostly higher, though Japanese markets fell after data showed industrial output in the country declined more than anticipated in May, marking the first contraction in four months.

The country's unemployment rate came in unchanged at 2.6 percent as expected while Tokyo consumer inflation accelerated in June, separate reports revealed.

Elsewhere, activity in China's factory sector contracted for a third straight month in June, official data showed earlier today - signaling patchy recovery and raising calls for more stimulus measures.

The official manufacturing purchasing managers' index (PMI) came in at 49.0, slightly above the 48.8 figure recorded in May and in line with forecasts by economists.

The official non-manufacturing PMI fell to 53.2 from 54.5 in May.

A private survey released alongside showed that China's stimulus measures unveiled last year did little to boot loan demand in the second quarter.

The dollar index held steady as investors await a U.S. report on personal income and spending for May, which includes readings on inflation said to be preferred by the Federal Reserve.

Eurozone and French inflation reports will also be in the spotlight, a day after reports showed inflation re-accelerated in Germany and drastically slowed in Spain.

Gold was virtually unchanged in Asian trade, while oil prices edged up slightly, adding to overnight gains. Bond yields remained elevated on bets for further rate hikes.

U.S. stocks ended mostly higher overnight, with banks rallying after Federal Reserve's annual bank stress tests showed that large banks are well positioned to weather a severe recession.

Meanwhile, U.S. GDP was revised up notably to a 2 percent annualized advance in the first quarter and the number of Americans filing new claims for unemployment benefits fell last week by the most in 20 months, pointing to continued strength in the world's largest economy.

The Dow climbed 0.8 percent and the S&P 500 gained half a percent while the tech-heavy Nasdaq Composite finished marginally lower.

European stocks ended Thursday's session on a mixed note as investors weighed the prospects of further policy tightening by major central banks.

The pan European STOXX 600 inched up 0.1 percent. The German DAX ended flat with a negative bias and the U.K.'s FTSE 100 shed 0.4 percent while France's CAC 40 edged up 0.4 percent.