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European stocks higher in thin trade; DAX up 1.12%

Published 12/22/2011, 04:12 AM
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Investing.com - European stock markets were higher on Thursday, as market sentiment improved in thin trade although concerns over the effects of the European Central Bank’s unprecedented loan operation continued to linger.

During European morning trade, the EURO STOXX 50 climbed 1.12%, France’s CAC 40 advanced 1.13%, while Germany’s DAX 30 added 1.12%.

The central bank allotted EUR489.19 billion, the largest amount ever allotted for a long-term refinancing operation, in an attempt to avoid a liquidity crunch in the single currency bloc.

The move was also hoped to increase bond purchases of indebted euro zone countries. But the unexpected heavy demand from 523 European lenders underlining concerns over the scale of the financial crisis in the euro zone.

Financial stocks led gains as shares in Germany’s Deutsche Bank surged 2.92% and Dutch lender ING Group jumped 2.32%, while France’s BNP Paribas and Credit Agricole soared 1.39% and 1.13% respectively. 

Peripheral lenders also added to gains with Italian groups Intesa Sanpaolo climbing 1.07% and Unicredit jumping 1.77%, while Spain’s BBVA and Banco Santander advanced 0.47% and 0.05%.

Meanwhile, German airline company Lufthansa surged 1.37% after International Consolidated Airlines reached a binding agreement to buy Lufthansa’s BMI unit in the U.K.

In London, FTSE 100 advanced 0.94% as U.K. lenders tracked their European counterparts sharply higher and ahead of a final report on third-quarter U.K. gross domestic product.

Shares in Barclays surged 2.30% and the Royal Bank of Scotland jumped 1.92%, while HSBC Holdings and Lloyds Banking climbed 1.58% and 0.90 respectively.

Elsewhere, mining giants Rio Tinto and Bhp Billiton added 0.98% and 0.78%, while copper producers Xstrata and Kazakhmys jumped 0.68% and 1.47%.

On the downside, Stagecoach, the operator of the U.K.’s biggest rail-commuter franchise retreated 1.22% after the company’s shares were downgraded to “underweight” from “overweight” at JPMorgan.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.38%, S&P 500 futures signaled a 0.38% increase, while the Nasdaq 100 futures indicated a 0.34% gain.

Later in the day, ECB President Mario Draghi was to hold a media briefing in Frankfurt after a meeting of the European Systemic Risk Board.

In the U.S., revised data on third quarter GDP was to be published as well as a weekly report on initial jobless claims.


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