Investing.com - European stocks closed higher Wednesday, as Spain missed an expected Moody’s downgrade to junk status and bullish U.S. numbers sparked the risk on trade.
At the close of European trade, the EURO STOXX 50 rose 0.86%, France’s CAC 40 added 0.76%, while Germany’s DAX 30 edged up 0.25%.
Sparking the rally, the number of housing starts in the U.S. rose to the highest level in four years in September, while building permits issued surged to the highest level since July 2008, easing concerns over the U.S. housing sector, official data showed Wednesday.
In a report, the U.S. Census Bureau that U.S. housing starts rose by 15% in September to a seasonally adjusted 0.872 million, blowing past expectations for a 2.7% increase to 0.770 million.
Housing starts for August were revised up to 0.758 million units from a previously reported 0.750 million units.
The report also showed that the number of building permits issued in September rose 11.6% to a seasonally adjusted 0.894 million, compared to expectations for a 1.1% gain to 0.810 million.
Stocks found support after Moody’s confirmed Spain’s credit rating at Baaa3 with a negative outlook, just one notch above junk status and expressed confidence that reforms enacted by the Spanish government and support from the euro zone would ensure that Madrid had continued access to the credit market.
The yield on Spanish 10-year bonds fell to 5.53% following the announcement, the lowest level since April.
Market sentiment has been supported over recent weeks amid hopes that Spain will soon request a bailout from its euro zone partners, but uncertainty over the timing of a request and what form a bailout would take has persisted.
Financial stocks remained broadly higher, as shares in French lenders BNP Paribas and Societe Generale rallied 2.38% and 2.57%, while Germany's Deutsche Bank and Commerzbank advanced 0.87% and 1.80% respectively.
Peripheral lenders also posted sharp gains, led by Spanish bank BBVA, up 3.93%, while Italy's Unicredit and Intesa Sanpaolo climbed 1.49% and 2.04%.
France's third largest bank, Credit Agricole remained lower on the other hand, as shares dove 2.14% after the lender said it is exiting Greece by agreeing to sell Emporiki Bank to Alpha Bank on terms that will cut net income by about EUR2 billion euros in the third quarter.
Also on the downside, ASML Holding tumbling 2.54% as Europe’s biggest semiconductor equipment maker forecast fourth-quarter sales that trailed behind projections.
In London, commodity-heavy FTSE 100 climbed 0.69%, supported by gains in mining stocks and after data showed that the unemployment rate in the U.K. ticked down to 7.9% in August from 8.1% the previous month.
Mining giants Rio Tinto and BHP Billiton pushed higher, as shares surged 3.74% and 2.23%, while copper producers Xstrata and Kazakhmys rallied 2.36% and 4.74% respectively.
Oil major Anglo American added to gains, with shares advancing 4.02%, as did rival BP, up 3.76%.
Elsewhere, financial stocks remained mixed. HSBC Holdings added 0.30% and the Royal Bank of Scotland jumped 1.64%, while Lloyds Banking dropped 0.96% and Barclays plummeted 1.19%.
Earlier in the day, the Royal Bank of Scotland agreed to exit the U.K.'s Asset Protection Scheme after paying GBP2.5 billion pounds to the government to insure its most risky assets. RBS was in 2009 the only lender to join the program, which covered potential losses on GBP282 billion of loans and derivatives.
In the U.S., equity markets followed mixed with the Dow Jones slipping 0.09%, the S&P 500 adding 0.36% and the tech heavy Nasdaq ahead by 0.30%.
Traders are awaiting U.S. initial jobless claims and Great Britain’s retail sales on Thursday.
At the close of European trade, the EURO STOXX 50 rose 0.86%, France’s CAC 40 added 0.76%, while Germany’s DAX 30 edged up 0.25%.
Sparking the rally, the number of housing starts in the U.S. rose to the highest level in four years in September, while building permits issued surged to the highest level since July 2008, easing concerns over the U.S. housing sector, official data showed Wednesday.
In a report, the U.S. Census Bureau that U.S. housing starts rose by 15% in September to a seasonally adjusted 0.872 million, blowing past expectations for a 2.7% increase to 0.770 million.
Housing starts for August were revised up to 0.758 million units from a previously reported 0.750 million units.
The report also showed that the number of building permits issued in September rose 11.6% to a seasonally adjusted 0.894 million, compared to expectations for a 1.1% gain to 0.810 million.
Stocks found support after Moody’s confirmed Spain’s credit rating at Baaa3 with a negative outlook, just one notch above junk status and expressed confidence that reforms enacted by the Spanish government and support from the euro zone would ensure that Madrid had continued access to the credit market.
The yield on Spanish 10-year bonds fell to 5.53% following the announcement, the lowest level since April.
Market sentiment has been supported over recent weeks amid hopes that Spain will soon request a bailout from its euro zone partners, but uncertainty over the timing of a request and what form a bailout would take has persisted.
Financial stocks remained broadly higher, as shares in French lenders BNP Paribas and Societe Generale rallied 2.38% and 2.57%, while Germany's Deutsche Bank and Commerzbank advanced 0.87% and 1.80% respectively.
Peripheral lenders also posted sharp gains, led by Spanish bank BBVA, up 3.93%, while Italy's Unicredit and Intesa Sanpaolo climbed 1.49% and 2.04%.
France's third largest bank, Credit Agricole remained lower on the other hand, as shares dove 2.14% after the lender said it is exiting Greece by agreeing to sell Emporiki Bank to Alpha Bank on terms that will cut net income by about EUR2 billion euros in the third quarter.
Also on the downside, ASML Holding tumbling 2.54% as Europe’s biggest semiconductor equipment maker forecast fourth-quarter sales that trailed behind projections.
In London, commodity-heavy FTSE 100 climbed 0.69%, supported by gains in mining stocks and after data showed that the unemployment rate in the U.K. ticked down to 7.9% in August from 8.1% the previous month.
Mining giants Rio Tinto and BHP Billiton pushed higher, as shares surged 3.74% and 2.23%, while copper producers Xstrata and Kazakhmys rallied 2.36% and 4.74% respectively.
Oil major Anglo American added to gains, with shares advancing 4.02%, as did rival BP, up 3.76%.
Elsewhere, financial stocks remained mixed. HSBC Holdings added 0.30% and the Royal Bank of Scotland jumped 1.64%, while Lloyds Banking dropped 0.96% and Barclays plummeted 1.19%.
Earlier in the day, the Royal Bank of Scotland agreed to exit the U.K.'s Asset Protection Scheme after paying GBP2.5 billion pounds to the government to insure its most risky assets. RBS was in 2009 the only lender to join the program, which covered potential losses on GBP282 billion of loans and derivatives.
In the U.S., equity markets followed mixed with the Dow Jones slipping 0.09%, the S&P 500 adding 0.36% and the tech heavy Nasdaq ahead by 0.30%.
Traders are awaiting U.S. initial jobless claims and Great Britain’s retail sales on Thursday.