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European Shares Rise After Successful Spain Auction

4/17/2012 6:30 AM ET

European shares rose on Tuesday, adding to the previous session's gains, as the results of the Spanish Treasury debt auction and data showing improvement in Germany's economic sentiment for the fifth straight month in April helped boost investor sentiment.

Meanwhile, IMF managing director Christine Lagarde said she is hopeful of lifting the organization's lending capacity by more than $400 billion after this week's meetings with global leaders. 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 Euro Stoxx 50 index of eurozone bluechip stocks is rallying 1.63 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is up 1.1 percent. Around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are gaining between 0.4 percent and 1.4 percent.

German conglomerate Bayer is climbing 1.8 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.

Spanish oil giant Repsol YPF SA is tumbling 6.4 percent in Madrid on news that the Argentinian government has initiated a process of parliamentary approval of a law for a change in control in YPF.

Shares of Rio Tinto Plc are edging down 0.2 percent in London after the mining giant reported a 11 percent sequential decline in iron ore output for the first quarter, as was widely expected.

Danone SA is gaining 2.4 percent in Paris after the French dairy firm reported a 7.6 percent increase in sales for the first-quarter, with growth across all divisions and regions.

On the macro-economic front, house prices in the UK increased 0.3 percent year-over-year in February after a flat reading in January, the Office for National Statistics said. Separate data showed that U.K. annual inflation rose to 3.5 percent in March from 3.4 percent in February. Economists were expecting the annual rate to remain at 3.4 percent.

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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