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European stocks up as Credit Agricole surges; DAX gains 0.85%

Published 08/25/2011, 05:32 AM
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Investing.com – European stock markets were broadly higher on Thursday, as upbeat results from French lender Credit Agricole lifted shares in the financial sector, while speculation over further stimulus by the Federal Reserve underpinned demand for riskier assets.

During European morning trade, the EURO STOXX 50 climbed 0.7% France’s CAC 40 rose 0.65%, while Germany’s DAX 30 advanced 0.85%

Shares in France’s third largest lender Credit Agricole surged 6.5% after it reported a 1.8% decline in second quarter net income, as results were weighed by its exposure to Greece, but revenue in the period rose 2% to EUR9.14 billion.

The upbeat results boosted other lenders in the region, with French rivals Societe Generale and BNP Paribas climbing 3.3% and 2.7% respectively, while Germany’s Deutsche Bank rose 2.2%.

Italian and Spanish bank were also higher amid speculation the European Central Bank was buying Italian and Spanish government debt. Italy’s second largest lender Intesa Sanpaolo saw shares gain 3.6%, while Spanish banking giant Banco Santander added 1.5%.

Meanwhile, shares in German steel producer ThyssenKrupp climbed 2.9% after Nomura Holdings upgraded the stock to ‘buy’, as it expected the company to outperform in a zero-growth environment.

In London, the FTSE 100 advanced 0.5%, as U.K. lenders tracked their European counterparts higher. Shares in Barclays soared 7.5%, Royal Bank of Scotland shares gained 6.5%, while Lloyds Banking Group shares added 3.3%.

The world’s largest commodities trader Glencore International jumped 3.5% after reporting first-half net income nearly doubled, citing “generally robust” demand for commodities.

Shares in wine and spirits maker Diageo climbed 5.1% after reporting a 16% increase in full-year profit, prompting the company to raise its growth target for the upcoming fiscal year. 

Elsewhere, the outlook for U.S. equity markets was downbeat, with Apple shares down 4.8% in pre-market trade after chief executive Steve Jobs announced his resignation after markets closed on Wednesday.  

The Dow Jones Industrial Average futures pointed to a decline of 0.2%, the S&P 500 futures indicated a drop of 0.35%, while the Nasdaq 100 futures showed a 0.8% decline.     

Later in the day, the U.S. was to publish government data on initial jobless claims.

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