EUROPE MARKETS: Europe Stocks Hold On To Seven-week High

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets moved slightly higher on Monday as investors digested a range of corporate news, with GlaxoSmithKline PLC on the decline after admitting executives may have breached Chinese law and UBS AG higher after a preliminary earnings statement.

The Stoxx Europe 600 index added 0.2% to 300.30, marking the highest close since late May. The index fluctuated between small gains and losses for most of the trading day.

"There's very little on the agenda today to persuade investors to take on any big positions. There's nothing to make investors think that the economy is better or worse than when they left on Friday. People are just threading water," said James Ashley, senior European economist at RBC Capital Markets.

Instead, he said, investors were waiting for top-tier data releases out later this week and next week.

"We can get a big surprise with the euro-zone PMIs on Wednesday and this can determine how the markets will move. We also have U.K. GDP on Thursday. But the potential for market-moving news is greater next week when we have some notable events with the [U.S. Federal Open Market Committee] meeting, Bank of England, European Central Bank and [U.S.] nonfarm payrolls," he added.

Global investors have recently paid close attention to data coming out of the U.S. to gauge whether they strengthen or weaken the case for the Federal Reserve to taper its asset purchases. Fed Chairman Ben Bernanke has said a reduction in purchases could happen later this year, depending on the incoming data.

U.S. stocks were higher on Wall Street in Monday's trade.

GSK adds pressure

Among notable movers in Europe, shares of GlaxoSmithKline (GSK) (GSK) gave up 1.2%, after the pharma major said some of its senior executives appeared to have violated Chinese law. The statement came after Chinese officials alleged that the company was involved in widespread bribery in the country in order to get health-care providers to prescribe its products.

Shares of Nokia Corp. (NOK) lost 1.2% after Oppenheimer cut the firm to underperform.

On a more upbeat note, investors welcomed UBS's (UBS) preliminary second-quarter results, sending the shares 2.5% higher. The Swiss investment bank said its second-quarter results, which are expected to be released in full on July 30, now include pretax charges for litigation matters totaling about 865 million Swiss francs ($919 million). UBS estimated that net income was 690 million Swiss francs. Additionally, the bank said it has settled with a U.S. regulator over claims related to mortgage-backed securities.

Investors in Europe also looked to Asia, where Japanese stocks closed higher after Prime Minister Shinzo Abe's governing bloc won a majority in Sunday's upper-house election.

Portuguese stocks rally

Back in Europe, Portugal's PSI 20 index rallied 2.3% to 5,651.40 after Prime Minister Pedro Passos Coelho vowed to stick to the country's bailout program after weeks of political uncertainty. Additionally, Coelho announced a cabinet reshuffle in which he intends to name Paulo Portas, his junior coalition partner, as Portugal's new deputy prime minister. Portas will be responsible for dealing with the Troika.

In Germany, the Bundesbank said in its monthly bulletin that the economy expanded strongly in the second quarter, an assessment that has been confirmed by current indicators. However, there are signs of a slowdown in economic growth in the summer quarter, the central bank said.

The DAX 30 index closed slightly lower at 8,331.06.

Shares of Deutsche Bank AG (DB) rose 1.4% after the Financial Times reported the bank plans to shrink its balance sheet by as much as one-fifth, in order to comply with stricter regulations.

Banks were also higher in France, where Société Générale SA added 1.5% and BNP Paribas SA climbed 1.7%. France's CAC 40 index gained 0.4% to 3,939.92.

The U.K.'s FTSE 100 index fell 0.1% to 6,623.17, weighed by Glaxo.

Outside the major indexes, shares of Royal Philips NV (PHG) climbed 2.1% after the firm reported a 2% rise in second-quarter revenue, as sales in China and other emerging markets continued to grow.

Shares of Saipem SpA picked up 2.7% after Barclays lifted the Italian oil-services firm to overweight from equal weight.

Julius Baer Gruppe AG rallied 5.7% after the bank reported first-half adjusted earnings per share at 1.23 Swiss francs, which Credit Suisse called "solid" and said were 10% higher than consensus expectations.

Ziggo NV dropped 2.9% after UBS cut the cable operator to neutral from buy.

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