Investing.com - European stocks turned higher on Thursday, following encouraging comments by European Central Bank policymaker Ewald Nowotny, although concerns over the handling of the debt crisis in the euro zone continued to loom.
During European afternoon trade, the EURO STOXX 50 jumped 0.88%, France’s CAC 40 advanced 0.69%, while Germany’s DAX 30 climbed 0.46%.
ECB Governing Council member Nowotny said that there were some arguments in favor of giving the euro zone’s bailout fund, the European Stability Mechanism, a banking license, which would increase its firepower to fight the debt crisis in the euro zone.
But investors remained cautious as the yield on Spanish 10-year government bonds remained above the 7.50% level, beyond the 7% threshold widely considered unsustainable in the long run, fuelling concerns that a full-scale sovereign bailout is inevitable.
Meanwhile, weak economic data out of German and the U.K. indicated that Europe’s largest economies are being affected by the debt crisis in the region.
The German research institute Ifo said its Business Climate Index fell to 103.3 in July, the lowest level since June 2010, while the Office for National Statistics said that U.K. gross domestic product contracted by 0.7% in the second quarter, far more than the 0.2% contraction economists had forecast, extending Britain's recession into a third quarter.
German lender Deutsche Bank remained one of the session’s top losers, with shares plummeting 4.30% after issuing a profit warning which fuelled worries the bank may have to raise capital.
But financial stocks remained mostly higher, led by Italy’s Intesa Sanpaolo and Unicredit, up 3.53% and 3.26%. France’s two biggest lenders Societe Generale and BNP Paribas also rallied 3.51% and 2.15% respectively.
Elsewhere, ArcelorMittal surged 2.77% although the steel company earlier announced a 63% fall in net income in the first half due to weak prices and falling deliveries.
In the auto sector, France’s Peugeot Citroen dropped 0.72%, erasing earlier gains, after announcing a first-half net loss of EUR819 million compared to a EUR806 million profit the previous year. The auto maker also said it is targeting a EUR600 million improvement from reorganizing its industrial base and squeezing costs.
In London, FTSE 100 rose 0.11%, boosted by strong gains in financial stocks and after official data showed that the U.K. economy contracted the most since the first quarter of 2009 in the three months to June.
Shares in the Royal Bank of Scotland rallied 3.03% and Barclays gained 2.19%, while HSBC Holdings and Lloyds Banking advanced 2.03% and 1.22% respectively.
Elsewhere, energy stocks were mixed as shares in BP fell 0.11% and Tullow Oil plummeted 4.49%, while Anglo American jumped 1.10%
Mining giants Rio Tinto and BHP Billiton turned higher, with shares climbing 0.74% and 1.13% respectively, while copper producers Xstrata and Kazakhmys advanced 0.86% and 1.32%.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.50% gain, S&P 500 futures signaled a 0.46% loss, while the Nasdaq 100 futures indicated a 0.38% decline.
Later in the day, the U.S. was to publish official data on new home sales, as well as a report on crude oil stockpiles.
During European afternoon trade, the EURO STOXX 50 jumped 0.88%, France’s CAC 40 advanced 0.69%, while Germany’s DAX 30 climbed 0.46%.
ECB Governing Council member Nowotny said that there were some arguments in favor of giving the euro zone’s bailout fund, the European Stability Mechanism, a banking license, which would increase its firepower to fight the debt crisis in the euro zone.
But investors remained cautious as the yield on Spanish 10-year government bonds remained above the 7.50% level, beyond the 7% threshold widely considered unsustainable in the long run, fuelling concerns that a full-scale sovereign bailout is inevitable.
Meanwhile, weak economic data out of German and the U.K. indicated that Europe’s largest economies are being affected by the debt crisis in the region.
The German research institute Ifo said its Business Climate Index fell to 103.3 in July, the lowest level since June 2010, while the Office for National Statistics said that U.K. gross domestic product contracted by 0.7% in the second quarter, far more than the 0.2% contraction economists had forecast, extending Britain's recession into a third quarter.
German lender Deutsche Bank remained one of the session’s top losers, with shares plummeting 4.30% after issuing a profit warning which fuelled worries the bank may have to raise capital.
But financial stocks remained mostly higher, led by Italy’s Intesa Sanpaolo and Unicredit, up 3.53% and 3.26%. France’s two biggest lenders Societe Generale and BNP Paribas also rallied 3.51% and 2.15% respectively.
Elsewhere, ArcelorMittal surged 2.77% although the steel company earlier announced a 63% fall in net income in the first half due to weak prices and falling deliveries.
In the auto sector, France’s Peugeot Citroen dropped 0.72%, erasing earlier gains, after announcing a first-half net loss of EUR819 million compared to a EUR806 million profit the previous year. The auto maker also said it is targeting a EUR600 million improvement from reorganizing its industrial base and squeezing costs.
In London, FTSE 100 rose 0.11%, boosted by strong gains in financial stocks and after official data showed that the U.K. economy contracted the most since the first quarter of 2009 in the three months to June.
Shares in the Royal Bank of Scotland rallied 3.03% and Barclays gained 2.19%, while HSBC Holdings and Lloyds Banking advanced 2.03% and 1.22% respectively.
Elsewhere, energy stocks were mixed as shares in BP fell 0.11% and Tullow Oil plummeted 4.49%, while Anglo American jumped 1.10%
Mining giants Rio Tinto and BHP Billiton turned higher, with shares climbing 0.74% and 1.13% respectively, while copper producers Xstrata and Kazakhmys advanced 0.86% and 1.32%.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.50% gain, S&P 500 futures signaled a 0.46% loss, while the Nasdaq 100 futures indicated a 0.38% decline.
Later in the day, the U.S. was to publish official data on new home sales, as well as a report on crude oil stockpiles.