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European stocks sharply higher as banks gain; DAX rallies 1.7%

Stock MarketsSep 15, 2011 05:22AM ET
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Investing.com – European stock markets were sharply higher on Thursday, as shares in the financial sector led gains after German Chancellor Angela Merkel and French President Nicolas Sarkozy reaffirmed their support for Greece.

During European morning trade, the EURO STOXX 50 jumped 1.8%, France’s CAC 40 rose 1.65%, while Germany’s DAX 30 rallied 1.7%.

The leaders of the euro zone’s two largest economies said in a statement following a conference call with Greek Prime Minister George Papandreou on Wednesday that they were “convinced the future of Greece is in the euro zone.”

Shares in the beaten-up financial sector were supported by the comments, with French banks BNP Paribas and Credit Agricole jumping 3.7% and 2% respectively, while Deutsche Bank shares rose 3.35%.

Spanish lenders were also higher, ahead of a closely-watch Spanish debt auction later in the day. Banco Santander shares gained 2.85%, while BBVA added 2.7%.

However, Swiss lender UBS tumbled 5.8% after it said it discovered a USD2 billion loss "due to unauthorized trading by a trader in its investment bank."

Meanwhile, shares in Swedish clothing retailer Hennes & Mauritz surged 6% after reporting that comparable sales held steady in August, confounding expectations for a 7.2% decline.

Elsewhere, in London, the FTSE 100 rose 1.3% as shares in Europe’s largest home-improvement retailer Kingfisher rallied 6% after reporting a 28% increase in first-half net profit, as growth in France offset lower U.K. sales.

Meanwhile, shares in oil major British Petroleum jumped 2.5% after results from a U.S. federal investigation published Wednesday showed that the oil giant wasn’t solely to blame for last year’s Deepwater Horizon oil spill.  

Financial sector stocks also contributed to gains, with Royal Bank of Scotland shares gaining 3.7%, while Lloyds Banking Group rose 3.4%.

Elsewhere, the outlook for U.S. equity markets was modestly higher. The Dow Jones Industrial Average futures pointed to a gain of 0.3%, S&P 500 futures signaled a rise of 0.25%, while the Nasdaq 100 futures indicated a 0.5% gain.      

Later in the day, the U.S. was to publish a flurry of data, with government reports on consumer price inflation, as well as the weekly report on initial jobless claims.

The country was also to publish official data on manufacturing activity in New York and Philadelphia, while Federal Reserve Chairman Ben Bernanke was to speak at a public event.


European stocks sharply higher as banks gain; DAX rallies 1.7%
 

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