Investing.com - European stocks closed sharply higherThursday, as hopes for progress to avoid a fiscal crisis in the U.S. supported market sentiment, although concerns over Greece continued to linger.
At the close of European trade, the EURO STOXX 50 jumped 1.37%, France’s CAC 40 rallied 1.53%, while Germany’s DAX 30 advanced 0.78%.
Market sentiment found support after U.S. President Barack Obama said Wednesday he hoped to reach an agreement with Congress before Christmas to avoid automatic tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Meanwhile, Italy saw borrowing costs fall sharply at an auction of five and 10-year government bonds on Thursday, with the yield on 10-year bonds down to 4.45%, a two year low and the yield on five-year bonds falling to 3.23%, also a two-year low.
Elsewhere in the euro zone, official data showed that the German unemployment rate remained unchanged at 6.9% in November as the number of unemployed people rose by 5,000, better than expectations for an increase of 15,000.
Financial stocks remained broadly higher, as shares in French lenders BNP Paribas and Societe Generale climbed 1% and 1.62%, while Germany's Deutsche Bank and Commerzbank advanced 1.56% and 1.92% respectively.
Peripheral lenders also posted sharp gains, led by Italy's Intesa Sanpaolo, up 4.25%, and closely followed by Unicredit, whose shares surged 2.96%, while Spanish banks BBVA and Banco Santander rallied 2.35% and 1.96%
Elsewhere, Zurich Insurance Group gained 2.09% after Chief Executive Officer Martin Senn said that he expects "significant additional efficiencies" from the company’s actions in 2012, which include cost cuts of USD200 million so far this year.
In London, commodity-heavy FTSE 100 climbed 1.15% at the close, boosted by gains in oil and mining stocks, while the Bank of England warned that U.K. banks may not have enough capital put aside to insulate them from future financial market shocks.
Mining giants Rio Tinto and BHP Billiton remained sharply higher, with shares surged 4.38% and 2.46%, while copper producers Xstrata and Kazakhmys jumped 2.50% and 3.98% respectively.
Oil and gas major Anglo American was also on the upside, advancing 2.09%, while rival BP added 0.08%.
The financial sector, stocks added to gains, as Barlays climbed 0.98% and the Royal Bank of Scotland rallied 1.09%, while HSBC Holdings advanced 1.19% and Lloyds Banking surged 1.44%.
On the downside, Kingfisher tumbled 1.46% after Europe’s largest home-improvement retailer said same-store sales in the U.K. and Ireland dropped 3.8%, more than analysts' estimates.
In the U.S., stocks followed higher with the Dow Jones up 0.20%, the S&P 500 higher by 0.41% and the tech heavy Nasdaq up 0.55%.
On Friday, investors are anticipating the Chicago PMI and a speech by European Central Bank President, Mario Draghi.