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European stocks mixed, eyes on German ruling; DAX up 0.25%

Stock MarketsSep 12, 2012 03:55AM ET
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Investing.com - European stocks were mixed on Wednesday, as markets were jittery ahead of a highly anticipated German court ruling later in the day, while hopes for imminent easing measures by the Federal Reserve continued to support sentiment.

During European morning trade, the EURO STOXX 50 added 0.27%, France’s CAC 40 dipped 0.01%, while Germany’s DAX 30 rose 0.25%.

Investors were cautious, although Germany’s constitutional court was expected back the euro zone’s bailout fund, the European Stability Mechanism in a ruling later in the day.

Meanwhile, markets eyed the outcome of the Fed’s policy meeting on Thursday, after disappointing U.S. employment data last week fueled fresh expectations for the central bank to add stimulus.

On Tuesday, Moody’s said that it could downgrade the U.S’s triple-A rating if budget negotiations for 2013 do not result in policy measures which will reduce the country’s debt.

Financial stocks were mostly lower, as shares in Germany’s Deutsche Bank dropped 0.94%, while French lenders Societe Generale and BNP Paribas declined 0.36% and 0.10% respectively.

Deutsche Bank on Tuesday announced plans to cut costs by EUR4.5 billion to boost profitability in the face of higher capital requirements and the euro zone’s sovereign debt crisis.

Italian lender Unicredit outperformed its counterparts however, with shares surging 1.34%, as did Spain’s Banco Santander, climbing 0.73% after Morgan Stanley raised its recommendation for bank to “overweight” from “equalweight”.

Meanwhile, Iberdrola gained 1.10% after Chairman Galan said in an interview that the company will reduce debt by as much as 20% by cutting costs.

In London, commodity-heavy FTSE 100 fell 0.09%, weighed by losses in mining and oil stocks.

Mining giants Rio Tinto and BHP Billiton retreated 0.59% and 0.39%, while copper producers Xstrata and Kazakhmys lost 0.32% and 0.18% respectively.

Also on the downside, oil and gas major Anglo American slumped 2.47%, while BP saw shares drop 0.40%.

Financial stocks were mixed, as shares in the Royal Bank of Scotland rallied 1.28% and Barclays advanced 1.08%, while Lloyds Banking gained 1% and HSBC Holdings edged down 0.14%.

Elsewhere, Kingfisher jumped 1.07%, even as the home-improvement retailer said first-half earnings slumped as concern about the euro zone debt crisis and wet weather deterred spending.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.24% rise, S&P 500 futures signaled a 0.19% increase, while the Nasdaq 100 futures indicated a 0.19% gain.

Also Wednesday, Spain’s Prime Minister Mariano Rajoy indicated that the country is considering getting assistance from the ECB’s bond purchasing program, but outruled a full-blown sovereign bailout.

Later in the day, the U.S. was to release official data on import prices, followed by a government report on crude oil stockpiles.

European stocks mixed, eyes on German ruling; DAX up 0.25%

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