By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Portuguese stocks slumped in an
otherwise upbeat European market on Monday, after the country's
high court struck down some of the austerity measures enacted as
part of its rescue plan.
Most other European stock markets climbed, rebounding after the
biggest weekly selloff since November in the wake of Friday's weak
U.S. employment data, as they tracked Japanese stocks higher.
The Stoxx Europe 600 index gained 0.2% to 287.72, after posting
the biggest daily loss since October on Friday.
"We're seeing a bit of a bounce back. You had the U.S. markets
close fairly solid [on Friday] compared to the losses in Europe and
with the huge gains you saw today on the Nikkei there's a bit of a
recovery," said Richard Perry, chief market strategist at Central
Markets in London.
But even with last week's dire data shaving off a good portion
of the European indexes, Perry was reluctant to use this as a
buy-in opportunity.
"Until the middle of last week I had been happy to buy into a
correction. But the U.S. data out last week was pretty bad. It does
open the eyes to potentially the U.S. recovery is not as strong as
you thought it would be," he added.
Portugal stocks drop
Portugal's PSI 20 index lost 1.4% to 5,558.63. The European
Commission on Sunday warned that if the nation fails to implement
its austerity program it could put future financial aid at risk.
The statement came after the country's high court ruled against
some of the austerity measures affecting public employees, creating
a large hole in the 2013 fiscal budget.
Analysts at Barclays said in a note that the court's decision
"comes at a particularly delicate time as Portugal was expecting
this week a favorable decision by its European peers (at the
Eurogroup/Ecofin meetings) on lengthening the maturity of the
program loans."
A move toward longer loan maturity would ease Portugal's return
"to the markets, which the government and troika had hoped for by
the end of this year," the analysts said.
Shares of Banco Comercial Português SA lost 3.5% and Banco
Espirito Santo SA dropped 4.1%.
In Greece, shares of National Bank of Greece SA sank 8.5% and
Eurobank Ergasias SA rose 29%, after a planned merger between the
two banks was halted by the government over the weekend. The
unexpected move comes amid fears that the merged lender would
become too big to be bailed out by the government.
The ATHEX Composite rose 0.5% to 827.16.
Other movers
Among other notable decliners, shares of Spirent Communications
PLC sank 4.3%, after UBS cut the firm to neutral from buy, worried
that the recovery is taking longer than anticipated.
Shares of Barry Callebaut AG, , the world's largest chocolate
maker by volume, dropped 3.1%, after first-half profit came in
below market expectations with a 7% decline.
The broader European stock markets, however, traded higher,
partly recovering from a sharp selloff last Friday, triggered by
U.S. nonfarm-payrolls data coming in well below estimates. The data
followed other disappointing releases last week, including initial
jobless claims and the ISM services index
U.S. stocks opened lower on Wall Street. Investors were
cautiously waiting for earnings from bellwether Alcoa Inc. (AA) to
unofficially kick off the first-quarter earnings season.
"Consumers had to deal with the expiration of the Bush tax cuts
and this earnings season could really tell us the effect of that,"
said Perry from Central Markets.
The U.K.'s FTSE 100 index added 0.3% to 6,268.56. Shares of
Polymetal International PLC added 5%, after the gold and silver
miner said 2012 full-year profit jumped 38% on the back of higher
sales and bringing new production sites on line.
In other news in Britain, former Prime Minister Margaret
Thatcher died Monday morning after stroke at the age of 87.
Thatcher was the first British female prime minister and the
longest serving in over 150 years. Read: Twitter mourns Margaret
Thatcher's death--an Iron Lady to be remembered
France's CAC 40 index gained 0.4% to 3,676.33, with shares of
oil major Total SA (TOT) up 0.4% as oil prices moved higher.
In Germany, the DAX 30 index rose 0.1% to 7,664.83. Read:
Germany's account surplus jumps; no one is happy
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