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European Shares Firm After Bond Auctions

4/24/2012 7:23 AM ET

European shares rebounded on Tuesday after yesterday's sell-off, as a series of decent Spanish, Dutch and Italian bond auctions eased concerns over Europe's debt crisis. More significantly, the Netherlands held a successful debt auction despite the collapse of the government over budget cuts a day earlier.

The Dutch government raised EUR 1.995 billion from the sale of 2- and 25-year bonds. The 3.75 percent July 2014 bond was placed at an average yield of 0.523 percent, while the 4 percent January 2037 bond was sold at a yield of 2.782 percent.

A parliamentary debate to discuss the political crisis, the interim budget cuts and a schedule of snap polls is expected to take place later today, and Rutte is due to address the parliament in the afternoon.

The Euro Stoxx 50 index of eurozone bluechip stocks is moving up 0.96 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, is up 0.42 percent. Around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are rising between 0.1 percent and 1.2 percent.

Infineon Technologies AG is climbing nearly 3 percent in Frankfurt after its U.S. peer Texas Instruments Inc forecast second-quarter earnings that topped analysts' estimates. Deutsche Bank is down half a percent on a report that Watson Pharmaceuticals Inc, in which the German lender is a major debt holder, might announce a deal to buy Actavis for around $6 billion.

ARM Holdings is tumbling 2.5 percent in London after it warned of a slowdown in the growth of royalty sales from its processor division. Royal Dutch Shell is gaining 0.8 percent after the oil giant said it has agreed to buy Cove Energy Plc, which operates in East Africa, for 1.12 billion pounds.

Anglo American Plc is edging down 0.13 percent after the diversified miner announced the final stage of the $1.4-billion Scaw Metals Group divestment.

Novartis shares are down 1.2 percent in Zurich after the company reported a lower profit for the first quarter, hit by weaker sales of its blood pressure pill Diovan.

GDF Suez SA is gaining half a percent in Paris after the French utility reiterated its guidance for 2012 earnings after reporting over 10 percent rise in first-quarter revenue, thanks to strong contributions from key business lines, including International Power.

Tire maker Michelin is climbing 7 percent as the company reaffirmed its 2012 objective of reporting a clear increase in operating income and positive free cash flow, before the impact of the sale of the Paris building.

In economic releases, French consumer confidence unexpectedly increased in April, rising for a second consecutive month to its highest level in 17 months, data released by INSEE showed today. The seasonally adjusted consumer confidence indicator rose to 88 from March's 87.

Commodities are trading mixed, while the Dow futures are rising 34 points ahead of data due on U.S. consumer confidence and homes sales.

Elsewhere, Asian shares fluctuated before ending mostly higher on Tuesday, as investors awaited the results of a two-day policy meeting of the U.S. Federal Reserve to find the probability of any further stimulus announcement.

With political turmoil and disappointing economic data undermining investor risk appetite, traders are hoping that the Fed might give some clues concerning a third-round of bond purchases at the meeting commencing today.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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