Investing.com - European stocks closed higher in Friday trade, on hopes for a resolution to the region’s debt threat after the swearing in of a new Greek leader, and Italian Senate passage of a package of austerity measures aimed at securing financial assistance.
At the end of Friday’s European session, the STOXX 50 Index strengthened by 3.10% to 2,324.81, France’s CAC 40 surged 2.76% to 3,348.63, Britain’s FTSE 100 advanced 1.85% to 5,545.38, while Germany’s DAX gained 3.22% to close at 6,057.03.
The Italian Senate approved, by a vote of 156 to 12, to approve the budget-cutting measures promised to the European Union in exchange for assistance in reining in the country’s national debt of USD2.6 trillion.
Yields on Italy’s 10-year bonds fell for the second day after rising to record levels earlier in the week, nearing the 7% threshold that prompted Ireland, Portugal and Greece to seek bailouts.
Passage of the measure was expected to be a precursor to the appointment of former European Union commissioner and economist Mario Monti to succeed outgoing Prime Minister Silvio Berlusconi.
And In Athens, Lucas Papademos was sworn in as the country’s new prime minister to replace outgoing Greek leader George Papandreou, adding further stability to a scenario of European debt progress.
French shares performed strongly a day after rating’s agency Standard & Poor said that it had not reduced France’s debt rating from its current AAA, clarifying an earlier transmission to subscribers as a technical error.
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S&P said France remained on its highest investment grade with a “stable” outlook.”
BNP Paribas SA leapt 5.6%, AXA SA advanced 3.97% and Societe Generale SA added 4.17%.
Other financials making gains included Commerzbank AG, up 3.96%, Deutsche Bank AG rose 4.45%, Lloyds Banking Group climbed 6.13% and Royal Bank of Scotland Group added 6.45%.
Italian banks posted even more impressive gains following Senate passage of the belt-tightening measures; UniCredit SpA closed up 5.43%, Intesa Sanpaolo SpA skyrocketed 8.82%, and Banco Popolare SC jumped 5.01%.
Italian telecom giant Telecom Italia SpA jumped 5.3% after the company announced a 13% gain in revenue for the third-quarter.
Vivendi added 2% after the company announced that its Universal Music Group unit had reached agreement to purchase recorded music assets of EMI Group from Citigroup Inc. for USD1.9 billion.
Meanwhile in mid-day trade on Wall Street the Dow Jones Industrial Average rose 2.12% to 12,145.90, the Nasdaq Composite Index gained 2.01% to 2,678.03 and the S&P 500 was higher by 1.94% to 1,263.72.