Investing.com - European stocks closed sharply higher Wednesday, as strong home sales numbers in the U.S. bolstered the risk on trade while Japanese easing measures added to the bullish environment.
At the close of European trade, the EURO STOXX 50 gained 0.56%, France’s CAC 40 climbed 0.54%, while Germany’s DAX 30 added 0.59%.
Igniting the rally, U.S. existing home sales rose more-than-expected in August, industry data showed on Wednesday.
In a report, the National Association of Realtors said that existing home sales rose by 7.8% to a seasonally adjusted 4.82 million units in August, beating expectations for a 2% increase to 4.55 million units.
Existing home sales in July totaled 4.47 million units.
Lawrence Yun, NAR chief economist, said, “The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions.".
The Bank of Japan said earlier that it was boosting the size of its asset-purchase program by JPY10 trillion, in an effort to boost slowing economic activity and to counter the strengthening yen.
Meanwhile, investors remained cautious amid reports Spanish Prime Minister Mariano Rajoy remains uncertain about asking for help from the European Central Bank's new bond-purchasing program, which would mean signing up to a permanent bailout fund.
Financial stocks were mixed, as shares in German lenders Deutsche Bank and Commerzbank rose 0.25% and 1.26%, while France's BNP Paribas and Societe Generale plummeted 2.28% and 2.20% respectively.
Peripheral lenders turned broadly lower, with shares in Italian banks Unicredit and Intesa Sanpaolo declining 1.02% and 0.40%, while Spain's Banco Santander and BBVA dropped 0.93% and 0.33%.
On the upside, Heineken held gains, soaring 6.37%, after stakeholders said they will back the company’s USD4.6 billion bid for Asia Pacific Breweries Ltd.
In London, commodity-heavy FTSE 100 added 0.06%, supported by sharp gains in oil and mining stocks and after the minutes of the Bank of England's August meeting showed that policymakers voted unanimously to leave policy unchanged.
Oil giant Anglo American remained one of the session's top gainers, with shares jumping 1.38%, while rival group BP climbed 0.78%.
Mining giant BHP Billiton added 0.21% and rival Rio Tinto dropped 0.74%, erasing earlier gains, while copper producers Xstrata and Kazakhmys remained higher, rising 0.14% and 2.32% respectively.
Lonmin was also on the upside, climbing 2.38%, after the company reached a pay agreement with workers at its Marikana mine in South Africa.
Meanwhile, financial stocks were mixed. Shares in HSBC Holdings jumped 1.17% and Lloyds Banking rose 0.33%, while the Royal Bank of Scotland and Barclays declined 0.51% and 1.65%.
In the U.S., equity markets followed higher with the Dow up 0.32%, the broad based S&P 500 higher by 0.31% and the tech heavy Nasdaq up by 0.13% midsession.
Investors are awaiting the U.S. initial jobless claims and ECB President Draghi’s speech on Thursday.
At the close of European trade, the EURO STOXX 50 gained 0.56%, France’s CAC 40 climbed 0.54%, while Germany’s DAX 30 added 0.59%.
Igniting the rally, U.S. existing home sales rose more-than-expected in August, industry data showed on Wednesday.
In a report, the National Association of Realtors said that existing home sales rose by 7.8% to a seasonally adjusted 4.82 million units in August, beating expectations for a 2% increase to 4.55 million units.
Existing home sales in July totaled 4.47 million units.
Lawrence Yun, NAR chief economist, said, “The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions.".
The Bank of Japan said earlier that it was boosting the size of its asset-purchase program by JPY10 trillion, in an effort to boost slowing economic activity and to counter the strengthening yen.
Meanwhile, investors remained cautious amid reports Spanish Prime Minister Mariano Rajoy remains uncertain about asking for help from the European Central Bank's new bond-purchasing program, which would mean signing up to a permanent bailout fund.
Financial stocks were mixed, as shares in German lenders Deutsche Bank and Commerzbank rose 0.25% and 1.26%, while France's BNP Paribas and Societe Generale plummeted 2.28% and 2.20% respectively.
Peripheral lenders turned broadly lower, with shares in Italian banks Unicredit and Intesa Sanpaolo declining 1.02% and 0.40%, while Spain's Banco Santander and BBVA dropped 0.93% and 0.33%.
On the upside, Heineken held gains, soaring 6.37%, after stakeholders said they will back the company’s USD4.6 billion bid for Asia Pacific Breweries Ltd.
In London, commodity-heavy FTSE 100 added 0.06%, supported by sharp gains in oil and mining stocks and after the minutes of the Bank of England's August meeting showed that policymakers voted unanimously to leave policy unchanged.
Oil giant Anglo American remained one of the session's top gainers, with shares jumping 1.38%, while rival group BP climbed 0.78%.
Mining giant BHP Billiton added 0.21% and rival Rio Tinto dropped 0.74%, erasing earlier gains, while copper producers Xstrata and Kazakhmys remained higher, rising 0.14% and 2.32% respectively.
Lonmin was also on the upside, climbing 2.38%, after the company reached a pay agreement with workers at its Marikana mine in South Africa.
Meanwhile, financial stocks were mixed. Shares in HSBC Holdings jumped 1.17% and Lloyds Banking rose 0.33%, while the Royal Bank of Scotland and Barclays declined 0.51% and 1.65%.
In the U.S., equity markets followed higher with the Dow up 0.32%, the broad based S&P 500 higher by 0.31% and the tech heavy Nasdaq up by 0.13% midsession.
Investors are awaiting the U.S. initial jobless claims and ECB President Draghi’s speech on Thursday.