Investing.com - European stocks rose sharply on Friday, led by financials as news of an agreement to help recapitalize the euro zone's struggling banks boosted market sentiment, while European Union leaders were to continue talks in Brussels for a second consecutive day.
During European morning trade, the EURO STOXX 50 surged 2.36%, France’s CAC 40 jumped 2.30%, while Germany’s DAX 30 rallied 2.23%.
Market sentiment found support after euro zone leaders agreed at a summit in Brussels that the region's rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc's future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country's budget deficit.
Euro zone officials added that they would speed up plans to create a single supervisor to oversee the euro zone's banks by the end of 2012.
Financial stocks led gains following the EU agreement, as shares in France's BNP Paribas and Societe Generale soared 5.46% and 4.90%, while Germany's two biggest lenders Deutsche Bank and Commerzbank rallied 4.31% and 3.34% respectively.
Peripheral lenders were also sharply higher. Shares in Italian Unicredit and Intesa Sanpaolo surged 5.44% and 4.79%, while Spain's BBVA and Banco Santander advanced 5.93% and 4.20%.
Meanwhile, Swiss pharmaceuticals company Actelion gained 2.07% after it said it received U.S. Food and Drug Administration approval for its Veletri drug for treating pulmonary arterial hypertension.
On the downside, Adidas saw shares tumble 1.22% after U.S. counterpart Nike reported an unexpected decline in fourth-quarter profit. Nike’s sales also slowed in Europe, which accounts for a quarter of its revenue, as recession and government cuts curbed consumer spending.
In London, FTSE 100 climbed 1.20%, boosted by gains in financial and mining stocks.
Shares in Lloyds Banking surged 2.47% and the Royal Bank of Scotland rallied 1.82%, while HSBC Holdings advanced 1.43% and Barclays eased up 0.09%. Barclays remained under pressure after U.S. and U.K. authorities fined the U.K. lender more than USD450 million for attempting to manipulate the London interbank offered rate, a benchmark interest rate.
Meanwhile, mining giants Rio Tinto and BHP Billiton surged 2.02% and 1.95%, while copper producers Xstrata and Kazakhmys advanced 1.34% and 1.60% respectively.
Cairn Energy also jumped 1.45%, after it raised USD365 million selling a stake in Cairn India Ltd., operator of the nation’s biggest oil deposit on land.
In the U.S., equity markets pointed to a sharply higher open. The Dow Jones Industrial Average futures pointed to a 0.92% gain, S&P 500 futures signaled a 1.18% jump, while the Nasdaq 100 futures indicated a 1.19% rally.
Later in the day, the euro zone was to release preliminary data on consumer price inflation, while the U.S. was to publish official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.
During European morning trade, the EURO STOXX 50 surged 2.36%, France’s CAC 40 jumped 2.30%, while Germany’s DAX 30 rallied 2.23%.
Market sentiment found support after euro zone leaders agreed at a summit in Brussels that the region's rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc's future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country's budget deficit.
Euro zone officials added that they would speed up plans to create a single supervisor to oversee the euro zone's banks by the end of 2012.
Financial stocks led gains following the EU agreement, as shares in France's BNP Paribas and Societe Generale soared 5.46% and 4.90%, while Germany's two biggest lenders Deutsche Bank and Commerzbank rallied 4.31% and 3.34% respectively.
Peripheral lenders were also sharply higher. Shares in Italian Unicredit and Intesa Sanpaolo surged 5.44% and 4.79%, while Spain's BBVA and Banco Santander advanced 5.93% and 4.20%.
Meanwhile, Swiss pharmaceuticals company Actelion gained 2.07% after it said it received U.S. Food and Drug Administration approval for its Veletri drug for treating pulmonary arterial hypertension.
On the downside, Adidas saw shares tumble 1.22% after U.S. counterpart Nike reported an unexpected decline in fourth-quarter profit. Nike’s sales also slowed in Europe, which accounts for a quarter of its revenue, as recession and government cuts curbed consumer spending.
In London, FTSE 100 climbed 1.20%, boosted by gains in financial and mining stocks.
Shares in Lloyds Banking surged 2.47% and the Royal Bank of Scotland rallied 1.82%, while HSBC Holdings advanced 1.43% and Barclays eased up 0.09%. Barclays remained under pressure after U.S. and U.K. authorities fined the U.K. lender more than USD450 million for attempting to manipulate the London interbank offered rate, a benchmark interest rate.
Meanwhile, mining giants Rio Tinto and BHP Billiton surged 2.02% and 1.95%, while copper producers Xstrata and Kazakhmys advanced 1.34% and 1.60% respectively.
Cairn Energy also jumped 1.45%, after it raised USD365 million selling a stake in Cairn India Ltd., operator of the nation’s biggest oil deposit on land.
In the U.S., equity markets pointed to a sharply higher open. The Dow Jones Industrial Average futures pointed to a 0.92% gain, S&P 500 futures signaled a 1.18% jump, while the Nasdaq 100 futures indicated a 1.19% rally.
Later in the day, the euro zone was to release preliminary data on consumer price inflation, while the U.S. was to publish official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.