Investing.com – European stocks traded higher on Tuesday as the UK Supreme Court ruled that the British government would require parliamentary approval to begin the negotiation process of leaving the European Union (EU), known as Brexit, and investors digested readings on business activity in the euro zone.
Nearing midday in Europe, the benchmark Euro Stoxx 50 gained 0.28%, France’s CAC 40 rose 0.24%, and Germany’s DAX 30 traded up 0.28%.
As widely expected, Britain’s top court ruled that Prime Minister Theresa May would need to seek parliamentary approval in order to trigger Article 50 which jumpstarts the process for the UK to be begin negotiating the Brexit.
The main opposition Labour Party repeated its promise not to block the move which was approved by 52% of British voters in last summer’s referendum.
Equities on both sides of the pond extended gains after the decision.
Also on watch, readings of business activity in the euro zone gave some mixed readings on Tuesday, though the overall take was positive with the region’s employment hitting a nine-year high as businesses reported what market research group Markit referred to as a “strong start to 2017”.
Specifically, the composite purchasing managers’ index (PMI) for January came out slightly under expectations as a strong reading in the manufacturing sector was undermined by a weaker-than-expected reading in the service sector.
On the company front, Aryzta AG (SIX:ARYN) crashed more than 30%, leading decliners in the wider Euro Stoxx 600, as the Swiss-Irish food group admitted it had an “unexpected and extremely disappointing” trading period in the five months ending December 2016.
The second largest decliner on the index was BT Group (LON:BT) with losses of more than 17% after the British telecom cut its revenue and earnings forecast for the next two years after accounting issues in its Italian business.
On the upside, Assicurazioni Generali (MI:GASI) SpA jumped 8% after the insurer bought voting rights worth 3.01% of lender Intesa Sanpaol'so (MI:ISP) share capital in a defensive move aimed at stopping the bank from buying a large stake in itself.
The Italian bank was down 4.5% leading losses on the Euro Stoxx 50.
Meanwhile, oil prices edged higher during European midday on Tuesday, bouncing back from the prior session's losses amid ongoing signs that major oil producers are sticking to their pledge to cut back output.
Iraq's oil minister said on Monday that most oil majors working on its territory were participating in oil output reductions agreed as part of the deal between OPEC and non-OPEC producers to help to balance the market.
Energy stocks were trading higher, as French oil and gas major Total SA (PA:TOTF) gained 0.58% , Italy’s ENI (MI:ENI) rose 0.78%, while Norwegian rival Statoil (OL:STL) traded up 1.20%.
Financial stocks also registered gains, as French lenders BNP Paribas (PA:BNPP) advanced 1.12% and Societe Generale (PA:SOGN) jumped 1.71%%, while Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) gained 1.12% and 0.38%, respectively.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) stood out with losses of 4.67% as Unicredit (MI:CRDI) soared 3.44%, respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) gained 2.38% and 1.64%, respectively.
In London, the commodity-heavy FTSE 100 gained 0.54% as investors put the court ruling behind them and the mining sector showed gains.
Shares in Glencore (LON:GLEN) jumped 3.01%, Anglo American (LON:AAL) soared 5.50%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) jumped 4.35% and 3.87%, respectively.
Energy stocks traded higher, as BP (LON:BP) gained 0.71% and rival Royal Dutch Shell (LON:RDSa) advanced 0.73%.
Financial stocks were broadly higher as shares in HSBC Holdings (LON:HSBA) rose 0.55% and the Royal Bank of Scotland (LON:RBS) traded up 1.39%, while Barclays (LON:BARC) and Lloyds Banking (LON:LLOY) gained 1.69% and 0.42%, respectively.
In the U.S., equity markets pointed to a slightly higher open. The Dow Jones Industrial Average futures inched up 0.07%, S&P 500 futures edged forward 0.04%, while the Nasdaq 100 futures advanced 0.07%.