Investing.com - European stocks turned sharply higher on Wednesday, as market sentiment strengthened after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism.
During European afternoon trade, the EURO STOXX 50 climbed 0.85%, France’s CAC 40 advanced 0.64%, while Germany’s DAX 30 rose 0.79%.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
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 broadly higher, led by Italian lender Unicredit, up 3.49%, and followed by Dutch financial services firm ING Group, whose shares surged 2.89%, while France’s Societe Generale and BNP Paribas jumped 1.26% and 0.89%.
Deutsche Bank underperformed on the other hand, shedding 0.27%, one day after announcing 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.
Elsewhere, Iberdrola rallied 2.22% 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 inched up 0.06%, as U.K. lenders tracked their European counterparts higher and after data showed that the U.K. claimant count fell unexpectedly in August.
Shares in Lloyds Banking surged 3.24% and the Royal Bank of Scotland climbed 3.21%, while Barclays and HSBC Holdings advanced 1.26% and 0.63% respectively.
Also on the upside, mining giants Rio Tinto and BHP Billiton erased earlier losses, rising 1.53% and 1.03%, while copper producers Xstrata and Kazakhmys added 0.42% and 1.03%.
Oil and gas major Anglo American remained moderately lower however, dipping 0.01%, while BP saw shares drop 0.88%.
Elsewhere, Barratt Developments plunged 6.74% after the homebuilder refrained from paying a dividend.
Home-improvement retailer Kingfisher advanced 0.88% on the other hand, even as 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 0.40% increase, S&P 500 futures signaled a 0.45% rise, while the Nasdaq 100 futures indicated a 0.60% 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.
During European afternoon trade, the EURO STOXX 50 climbed 0.85%, France’s CAC 40 advanced 0.64%, while Germany’s DAX 30 rose 0.79%.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
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 broadly higher, led by Italian lender Unicredit, up 3.49%, and followed by Dutch financial services firm ING Group, whose shares surged 2.89%, while France’s Societe Generale and BNP Paribas jumped 1.26% and 0.89%.
Deutsche Bank underperformed on the other hand, shedding 0.27%, one day after announcing 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.
Elsewhere, Iberdrola rallied 2.22% 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 inched up 0.06%, as U.K. lenders tracked their European counterparts higher and after data showed that the U.K. claimant count fell unexpectedly in August.
Shares in Lloyds Banking surged 3.24% and the Royal Bank of Scotland climbed 3.21%, while Barclays and HSBC Holdings advanced 1.26% and 0.63% respectively.
Also on the upside, mining giants Rio Tinto and BHP Billiton erased earlier losses, rising 1.53% and 1.03%, while copper producers Xstrata and Kazakhmys added 0.42% and 1.03%.
Oil and gas major Anglo American remained moderately lower however, dipping 0.01%, while BP saw shares drop 0.88%.
Elsewhere, Barratt Developments plunged 6.74% after the homebuilder refrained from paying a dividend.
Home-improvement retailer Kingfisher advanced 0.88% on the other hand, even as 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 0.40% increase, S&P 500 futures signaled a 0.45% rise, while the Nasdaq 100 futures indicated a 0.60% 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.