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European stocks higher on debt hopes; DAX jumps 1.40%

Stock MarketsJan 10, 2012 04:24AM ET
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Investing.com - European stock markets were sharply higher on Tuesday, as investors focused on a meeting between German Chancellor Angela Merkel and International Monetary Fund President Christine Lagarde later in the day.

During European morning trade, the EURO STOXX 50 surged 1.40%, France’s CAC 40 advanced 0.89%, while Germany’s DAX 30 jumped 1.11%.

Angela Merkel warned Greece on Monday that it would not be possible to give further financial aid without swift progress on its second rescue package, including a voluntary write-down on Greek debt held by private creditors.

Merkel also said she was optimistic that the European Union will be able to sign off its fiscal pact by the end of January.

Meanwhile, concerns over weakness in the euro zone banking sector persisted after a report showed that overnight deposits at the European Central Bank on Tuesday hit a fresh record of EUR481.935 billion, indicating that banks in the region remain unwilling to lend to each other.

Financial stocks were broadly higher as shares in German Deutsche Bank jumped 1.86% and Dutch lender ING Group surged 2.35%, while France’s BNP Paribas and Societe Generale soared 3.46% and 1.13% respectively.

Earlier Tuesday, Societe Generale forecast a “significant” drop in 2012 investment bank revenue compared with 2011.

Meanwhile, Swatch advanced 3.51% after the biggest maker of Swiss watches said gross sales increased 22% on a constant-currency basis to CHF7.14 billion. According to the company, the strength of the franc stripped CHF696 million from revenue.

In London, FTSE 100 climbed 0.95%, led by a rally in mining companies after Alcoa kicked off the U.S. earnings season with results that met analysts’ estimates.

Bhp Billiton and Rio Tinto surged 2.24% and 2.01% as copper rebounded from a one-week low on record monthly imports of the metal in China.

U.K. lenders also added to gains with Barclays soaring 2.92% and Lloyds Banking climbing 1.52%, while the Royal Bank of Scotland and HSBC Holdings added 1.44% and 0.27% respectively.

Elsewhere, Marks & Spencer jumped 2.22% although the U.K.’s largest clothing retailer said non-food sales fell more-than-expected over Christmas and warned profitability would be lower at the unit as it promoted more.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a gain of 0.59%, S&P 500 futures signaled a 0.66% increase, while the Nasdaq 100 futures indicated a 0.68% jump.

Also Tuesday, official data showed that French industrial production rose more-than-expected in November, climbing 1.1% after a 0.1% rise the previous month.

Analysts had expected French industrial production to rise 0.1% in November.



European stocks higher on debt hopes; DAX jumps 1.40%
 

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