Forexpros – European stock markets were higher in choppy trade on Tuesday, boosted by strong gains in the financial sector as investors eyed a Spanish government bond auction later in the day.
During European morning trade, the EURO STOXX 50 climbed 0.71%, France’s CAC 40 rose 0.58%, while Germany’s DAX 30 added 0.46%.
Investors were cautious as Spain was due to auction up to EUR3 billion of 12 and 18-month government bonds later Tuesday, as concerns mounted that the government will not be able to meet deficit reduction targets in the face of a looming recession.
The cost of insuring Spanish sovereign debt against default rose to a record on Monday, pushing the yield on the country’s 10-year bonds above 6% for the first time since early December.
Markets were also jittery as concerns over China’s economic outlook intensified after data released earlier showed that foreign direct investment into China in March declined 6.1% from a year earlier to USD11.76 billion.
Financial stocks were broadly higher, led by Dutch lender ING Group, up 3.35%, and closely followed by France’s Societe Generale and BNP Paribas, with shares climbing 3.36% and 2.28% respectively.
German lenders were also sharply higher as shares in Deutsche Bank jumped 1.92% and Commerzbank added 1.20%.
Meanwhile, French retailer Carrefour was among the session’s top gainers, up 3.41%, after announcing last week that it generated EUR22.49 billion in sales in the first quarter, which represents a 1.5 % increase compared to the same quarter last year.
On the downside, Spanish oil and gas group Repsol tumbled 3.99% after Argentina’s government forcefully intervened in its local unit Monday and vowed to pass a law expropriating 51% of the company soon.
In London, FTSE 100 rose 0.36%, as U.K. lenders tracked their European counterparts sharply higher.
Shares in Barclays surged 3.57% and the Royal Bank of Scotland jumped 1.94%, while Lloyds Banking and HSBC Holdings added 1.85% and 0.27% respectively.
Mining stocks, however, were broadly lower. Rio Tinto saw shares fall 0.47% and Bhp Biliton tumbled 1.06%, while copper producer Xstrata edged down 0.09%.
Oil and gas major Essar Energy contributed to losses, plunging 3.09%, as continued talks with the State Bank of India to arrange a six-year loan to pay INR63 billion in sales tax to a state government.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.20%, S&P 500 futures signaled a 0.19% increase, while the Nasdaq 100 futures indicated a 0.17% gain.
Later in the day, the U.S. was to produce government data on building permits, housing starts and industrial production.
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