Investing.com - European stocks opened higher on Wednesday, as concerns over tensions between North Korea and the U.S. began to subside and demand for the riskier assets found fresh support.
During European morning trade, the EURO STOXX 50 climbed 0.65%, France’s CAC 40 gained 0.66%, while Germany’s DAX 30 advanced 0.73% by 03:40 a.m. ET (07:40 GMT).
Sentiment was hit after North Korea fired a missile that flew over northern Japan, in the latest act of provocation by Pyongyang.
Japan's Prime Minister Shinzo Abe said that the missile posed a grave threat to his country. The U.S., Japan and South Korea asked for a United Nations Security Council meeting to discuss the test.
But market sentiment improved as U.S. President Donald Trump's reaction to the North Korean aggression was seen as more moderate than in the past. The U.S. President did warn that "all options are on the table" however.
Financial stocks were broadly higher, erasing the previous day's losses, as French lenders Societe Generale (PA:SOGN) and BNP Paribas (PA:BNPP) advanced 0.91% and 0.51%, while Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) jumped 1.08% and 1.28%.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) climbed 0.57% and 2.30% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) rose 0.22% and 0.65%.
Elsewhere, Prosiebensat 1 Media AG (DE:PSMGn) shares dropped 0.51% after the German media giant revised its third-quarter forecasts following indications that expectations of improved ad revenue for the Broadcasting German-speaking segment of the media group are “unlikely to be met.”
In London, FTSE 100 gained 0.60%, as U.K. lenders tracked their European counterparts higher.
Shares in Lloyds Banking (LON:LLOY) rose 0.41% and HSBC Holdings (LON:HSBA) jumped 1.08%, while Barclays (LON:BARC) rallied 1.34%.
The Royal Bank of Scotland (LON:RBS) underperformed however, as shares tumbled 1.67%. The lender made headlines last week, as it has been accused of ruining towns and villages by banning rivals from reopening many of the branches it has closed.
Meanwhile, mining stocks were mixed on the commodity-heavy index. BHP Billiton (LON:BLT) gained 0.30% and Glencore (LON:GLEN) advanced 0.74%, while Fresnillo (LON:FRES) declined 0.74% and Rio Tinto (LON:RIO) lost 1.28%.
Gold miner Randgold Resources (LON:RRS) was one of the worst performers on the index, with shares down 1.14%, as gold prices turned lower on Wednesday. The move was most likely due to profit-taking after the precious metal climbed to a 10-month peak on Tuesday amid hightened geopolitical tensions.
WPP (LON:WPP) added to losses, as shares retreated 0.92%. The advertising group last week slashed its growth forecast for the second time, leaving it to face its worst year in a decade.
Market participants were also focusing on the third round of Article 50 negotiations between the U.K. and the European Union, which began on Monday.
European Commission President Jean-Claude Juncker criticized the UK's Brexit negotiations this week, stating that the country had failed to answer "huge numbers of questions" on its plans.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.28% gain, S&P 500 futures signaled a 0.26% rise, while the Nasdaq 100 futures indicated a 0.42% increase.