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German Shares Rally After Spain Auction

German shares edged higher on Tuesday, adding to the previous session's gains, as the results of the Spanish Treasury debt auction and IMF managing director Christine Lagarde's comments that she is hopeful of lifting the organization's lending capacity by more than $400 billion after this week's meetings with global leaders helped boost investor sentiment.

Finance ministers and central bank governors of G20 nations will meet in Washington on April 19 and 20. The semiannual meetings of the IMF and World Bank will be held on April 20 and 22.

Spain paid higher yields at a treasury bill auction today despite strong demand, adding to worries that the euro area country may be forced to seek a bailout. The Treasury raised EUR 3.18 billion from the sale of 12- and 18-month treasury bills.

The yield on the 12-month paper rose to 2.623 percent from 1.418 percent in the previous sale on March 20, while the bid-to-cover ratio, rose to 2.9 from 2.14. The 18-month bill was placed at a yield of 3.110 percent, up from 1.711 percent in the previous sale in March.

The benchmark German DAX is currently at 6,697, up 72 points or 1.1 percent from its previous close, while France's CAC 40 is rising 1.6 percent, the U.K.'s FTSE 100 is gaining 0.8 percent and Switzerland's SMI is up 0.4 percent. The Euro Stoxx 50 index of eurozone bluechip stocks is rallying 1.66 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is up 1.1 percent.

Financial stocks are leading the gainers, with CommerzBank and Deutsche Bank rising 2-3 percent. Among automakers, Daimler is up 2 percent, while Volkswagen is edging down marginally.

Bayer is up 1.9 percent after its subsidiary Bayer HealthCare released Xarelto or Rivaroxaban study results, reaffirming the benefits of the oral, once-daily anticoagulant in everyday clinical practice.

Wincor Nixdorf AG, a provider of IT solutions and services to retailers and retail banking, is tumbling 8.3 percent after the company said it expects operating profit for the fiscal year to contract significantly to around EUR100 million, compared to prior year's profit of EUR 162 million after taking into account costs of about EUR40 million attributable to a restructuring program already initiated by the company.

On the macroeconomic front, Germany's economic sentiment improved for the fifth straight month in April, the Mannheim-based Centre for European Economic Research (ZEW) said. The indicator of economic sentiment rose to 23.4 in April from 22.3 in March. Economists had expected the index to fall to 19. Meanwhile, the indicator assessing the current economic situation rose to 40.7 in April from 37.6 in the previous month.

Separately, Eurozone annual inflation for March was revised up to 2.7 percent from 2.6 percent, final data from Eurostat showed. The rate was 2.7 percent in February. On a monthly basis, inflation came in at 1.3 percent in March.

Elsewhere, stocks ended mostly lower across Asia, while trading in the U.S. index futures point to a firm opening as investors await the housing starts and the industrial production reports.

by RTT Staff Writer

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