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European stocks edge higher on bank earnings, Draghi; Dax up 0.15%

Published 05/07/2013, 03:44 AM
Updated 05/07/2013, 03:46 AM
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Investing.com - European stocks were moderately higher on Tuesday, boosted by bank earnings reports and new indications of a potential rate cut by the European Central Bank, after recent economic data out of the euro zone sparked fresh concerns over the outlook for growth in the bloc.

During European morning trade, the EURO STOXX 50 edged 0.13% higher, France’s CAC 40 eased up 0.06%, while Germany’s DAX 30 added 0.15%.

ECB President Mario Draghi said the bank would monitor all euro zone economic data in the coming weeks and was ready to act if needed, suggesting that the bank could cut rates further in order to support the euro zone economy.

In a speech in Rome, Draghi said last week’s rate cut by the ECB was due to the economic slowdown in the euro zone affecting core economies and urged governments to make fiscal consolidation a priority.

Financial stocks were broadly higher, as shares in French lenders BNP Paribas and Societe Generale advanced 0.66% and 4.28%, while Germany's Deutsche Bank and Commerzbank rallied 1.18% and 4.16%.

Societe Generale said earlier that first-quarter profit dropped 50% to EUR364 million euros, still beating the EUR317 million average estimate, while Commerzbank reported a first-quarter loss of EUR94 million, beating the average loss estimate of EUR153.7 million.

Peripheral lenders added to gains, with Spanish banks BBVA and Banco Santander rising 0.18% and 0.64% respectively, while Italy's Intesa Sanpaolo and Unicredit added 0.29% and 0.70%.

On the downside, Alstom dove 8.90% as the world’s third-largest power-equipment maker cut its profitability forecast after full-year earnings missed market estimates.

In London, commodiy-heavy FTSE 100 edged up 0.03%, supported by gains in mining stocks.

Mining giants Rio Tinto and BHP Billiton saw shares jump 1.78% and 2%, while Glencore surged 2.07%.

Meanwhile, financial stocks were mostly higher, as Lloyds Banking rallied 0.93% and Barclays jumped 1.92%, while HSBC Holdings dipped 0.01% and the Royal Bank of Scotland tumbled 1.48%.

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.01% gain, S&P 500 futures signaled a 0.07% loss, while the Nasdaq 100 futures indicated a 0.07% rise.

Later in the day, Germany was to release official data on factory orders.


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