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European stocks higher on Greek bailout optimism; DAX up 0.75%

Published 03/13/2012, 05:32 AM
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Investing.com - European stock markets were broadly higher on Tuesday, with shares in the financial sector leading gains after euro zone finance ministers indicated that Greece would receive formal approval for its second bailout early this week.

During European morning trade, the EURO STOXX 50 rose 0.7%, France’s CAC 40 gained 0.65%, while Germany’s DAX 30 climbed 0.75%.

Head of the Eurogroup of finance ministers, Jean-Claude Juncker, said Monday there was "no doubt" that a second bailout for Greece, worth EUR130 billion, would be approved later in the week.

The Eurogroup meeting continues Tuesday, with ministers likely to discuss Spain’s debt situation, demanding it aim for a tougher deficit target this year in order to get back on target in 2013.

Shares in lenders led markets higher across the continent, with Germany’s Commerzbank up 2.5% and France’s BNP Paribas gaining 1.25%.

Peripheral lenders were also broadly higher, with Italian banking heavyweights Unicredit and Intesa Sanpaolo rising 1.8% and 2.45% respectively, while Spain’s Banco Santander climbed 1.2%.

French waste-and-water utility Veolia Environnement advanced 2.4% after securing a EUR387 million contract to provide drinking water to the city of Nagpur, India for a 25 years.

Investors were looking toward Germany’s ZEW business expectations survey for March, due later in the day, to show improvement for the fourth consecutive month.

Elsewhere, London’s commodity-heavy FTSE 100 rose 0.55%, boosted by gains in lenders and miners.

Europe’s largest bank HSBC Holdings added 1.55%, Barclays gained 1.3% and Royal Bank of Scotland rose 1.35%.

Meanwhile, raw material producers contributed to gains as commodity prices rose on the New York Mercantile Exchange. Mining giants Rio Tinto and BHP Billiton saw shares gain 1.3% and 1.1% respectively, while copper producer Kazakhmys added 1.55%.

However, Antofagasta dropped 2.1% after reporting lower-than-expected 2011 net profit.

In the U.S., equity markets pointed to an upbeat as traders were awaiting the outcome of a Federal Reserve policy meeting later in the day.

The meeting comes after Friday’s robust U.S. employment data, which showed that the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain.

The upbeat data diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.

However, the Wall Street Journal reported last week that the Fed is considering a strategy that would allow it to undertake another round of bond buying, while lowering the risk of inflation.

The Dow Jones Industrial Average futures pointed to a gain of 0.45%, S&P 500 futures signaled a 0.6% increase, while the Nasdaq 100 futures indicated a 0.65% gain.

Later in the day, the U.S. was also to release government data on retail sales and business inventories.

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