Investing.com - European stock markets turned higher on Wednesday, erasing earlier losses after China said it was cutting its banks' reserve requirement ratios, supporting risk appetite.
During European morning trade, the EURO STOXX 50 jumped 1.02%, France’s CAC 40 advanced 0.88%, while Germany’s DAX 30 surged 1.54%.
The Peoples Bank of China announced earlier that it plans to cut banks reserve requirement ratios by 0.5%, in an effort to help boost liquidity and support the world’s second largest economy amid global market turmoil.
Earlier Wednesday, market sentiment was hit after Standard & Poor’s reduced its credit ratings on 15 global banking companies as part of a wider overhaul of the agency’s ratings.
Investors were also cautious after euro zone finance ministers agreed Tuesday on a plan to expand the region’s bailout fund, but said its capacity to assist indebted nations would not be as large as initially hoped.
The ministers also signed off on Greece’s next tranche of bailout aid.
Mining and energy stocks led gains as shares in France’s ArcelorMittal surged 2.27%, while German groups RWE and E.ON AG jumped 1.40% and 1.25% respectively.
Meanwhile, the financial sector turned broadly higher, with French lender BNP Paribas advancing 0.46% and Societe Generale climbing 1.35%, while Germany’s Deutsche Bank jumped 1.56%.
BNP Paribas and Societe Generale were two of the few banking companies that saw their ratings left unchanged by S&P. The ratings agency cut its outlook for Deutsche Bank, however, to “negative” from “stable.”
In London, FTSE 100 rose 0.85%, as U.K. lenders tracked their European counterparts higher.
Shares in Lloyds Banking soared 3.84% and the Royal Bank of Scotland climbed 3.33%, while Barclays and Anglo American gained 3.07% and 1.58% respectively.
Barclays and Lloyds Banking were downgraded by one notch each by S&P.
The mining sector also turned sharply higher as shares in Rio Tinto and Bhp Billiton surged 2.70% and 1.97%, while Xstrata and Kazakhmys jumped 3.42% and 2.76%.
Elsewhere, Shire led health-care shares higher, with shares climbing 1.47% after Citigroup recommended buying the stock.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.54%, S&P 500 futures signaled a 0.64% advance, while the Nasdaq 100 futures indicated a 0.63% gain.
Also Wednesday, official data showed that the rate of consumer price inflation in the single currency bloc remained unchanged at 3% for the third straight month in November, indicating that the European Central Bank may have to hold off on rate cuts in the coming months.
A separate report showed that unemployment in the euro zone ticked up to 10.3% last month from 10.2% in September.
Later in the day, the U.S. was to release a closely watched report on non-farm payrolls compiled by payroll processing firm ADP, as well as data on manufacturing activity in the Chicago area and pending home sales.
During European morning trade, the EURO STOXX 50 jumped 1.02%, France’s CAC 40 advanced 0.88%, while Germany’s DAX 30 surged 1.54%.
The Peoples Bank of China announced earlier that it plans to cut banks reserve requirement ratios by 0.5%, in an effort to help boost liquidity and support the world’s second largest economy amid global market turmoil.
Earlier Wednesday, market sentiment was hit after Standard & Poor’s reduced its credit ratings on 15 global banking companies as part of a wider overhaul of the agency’s ratings.
Investors were also cautious after euro zone finance ministers agreed Tuesday on a plan to expand the region’s bailout fund, but said its capacity to assist indebted nations would not be as large as initially hoped.
The ministers also signed off on Greece’s next tranche of bailout aid.
Mining and energy stocks led gains as shares in France’s ArcelorMittal surged 2.27%, while German groups RWE and E.ON AG jumped 1.40% and 1.25% respectively.
Meanwhile, the financial sector turned broadly higher, with French lender BNP Paribas advancing 0.46% and Societe Generale climbing 1.35%, while Germany’s Deutsche Bank jumped 1.56%.
BNP Paribas and Societe Generale were two of the few banking companies that saw their ratings left unchanged by S&P. The ratings agency cut its outlook for Deutsche Bank, however, to “negative” from “stable.”
In London, FTSE 100 rose 0.85%, as U.K. lenders tracked their European counterparts higher.
Shares in Lloyds Banking soared 3.84% and the Royal Bank of Scotland climbed 3.33%, while Barclays and Anglo American gained 3.07% and 1.58% respectively.
Barclays and Lloyds Banking were downgraded by one notch each by S&P.
The mining sector also turned sharply higher as shares in Rio Tinto and Bhp Billiton surged 2.70% and 1.97%, while Xstrata and Kazakhmys jumped 3.42% and 2.76%.
Elsewhere, Shire led health-care shares higher, with shares climbing 1.47% after Citigroup recommended buying the stock.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.54%, S&P 500 futures signaled a 0.64% advance, while the Nasdaq 100 futures indicated a 0.63% gain.
Also Wednesday, official data showed that the rate of consumer price inflation in the single currency bloc remained unchanged at 3% for the third straight month in November, indicating that the European Central Bank may have to hold off on rate cuts in the coming months.
A separate report showed that unemployment in the euro zone ticked up to 10.3% last month from 10.2% in September.
Later in the day, the U.S. was to release a closely watched report on non-farm payrolls compiled by payroll processing firm ADP, as well as data on manufacturing activity in the Chicago area and pending home sales.