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Banks, Basf Lead German Market Rally

The German market is trading higher on Friday, as some positive corporate news and broker comments cheered investors. Sentiment was also influenced by firm cues from Asia and the previous session in the U.S. which rose on economic optimism.

Investors breathed a sigh of relief as Greek Parliament on Thursday endorsed the debt swap deal with its private creditors, clearing one of the main hurdles for securing a rescue package worth 130 billion euros.

Bank of England policymaker Paul Fisher said he is keeping an open mind on yet another round of quantitative easing, given the ongoing economic uncertainty. "At this moment in time I would have a completely open mind going into the next round as to whether we would want to do more QE or not," Fisher said in an interview to City A.M. published today.

The Euro Stoxx 50 index of eurozone bluechip stocks is advancing 0.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.08 percent.

The DAX index opened higher and is currently advancing 0.83 percent.

Exane BNP cut Commerzbank to "Underperform" from "Neutral," while Merrill Lynch raised Deutsche Bank to "Buy" from "Neutral." Merrill also added Deutsche Bank to "Europe 1 List."

Deutsche Bank is climbing 3.3 percent and Commerzbank is rising 2 percent.

Basf is gaining 2.4 percent. The chemicals giant, which reported higher fourth-quarter earnings, sees growth in fiscal year 2012 earnings and sales.

SAP is climbing 2 percent. The company decided to hike dividend by 83 percent. Morgan Stanley re-initiated the stock with an "Overweight" rating.

Volkswagen is losing 0.3 percent after the car maker reported a surge in profit for 2011. Daimler and BMW are notably higher.

Utilities E.ON and RWE are notably higher.

Henkel and Adidas are making notable losses.

Fragrances and flavors manufacturer Symrise is falling 1.1 percent. Commerzbank cut the stock to "Hold" from "Buy."

Equinet lowered Fraport to "Hold" from "Buy." The stock is moderately higher.

Elsewhere in Europe, the French CAC 40 is advancing 0.50 percent and the UK's FTSE 100 is up 0.03 percent. Switzerland's SMI is losing 0.33 percent.

In economic news, the German economy contracted 0.2 percent quarter-on-quarter in the fourth quarter, an updated estimate from the Federal Statistical Office confirmed. Compared to the previous quarter, exports declined 0.8 percent, while economists expected a 1.4 percent decline. Investment rose 1.1 percent compared to expectations for a 0.5 percent rise.

Across Asia/Pacific, economic optimism influenced sentiment with major markets closing higher. Australia's All Ordinaries and Japan's Nikkei 225 gained about 0.5 percent while Hong Kong's Hang Seng edged up 0.12 percent. China's Shanghai Composite Index climbed 1.25 percent to a six-month high.

In the U.S., futures point to a slightly higher open on Wall Street. In the previous session, the major averages recovered from early weakness as upbeat jobs data overshadowed some disappointing earnings news. The Dow rose 0.4 percent, the Nasdaq jumped 0.8 percent and the S&P 500 climbed 0.4 percent.

In the commodity space, crude for April delivery is advancing $0.37 to $108.20 per barrel while April gold is declining $5.9 to $1780.4 a troy ounce.

by RTTNews Staff Writer

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