German stocks rose for a second consecutive session on Wednesday, with banks and tech shares leading the gainers, as forecast-beating corporate earnings soothed growing worries about France and the Netherlands.
Investors also shrugged off news that the U.K. economy unexpectedly shrank in the first quarter, entering a double-dip recession for the first time since 1970s, according to preliminary estimate published by the Office for National Statistics.
CommerzBank is climbing 4.3 percent and Deutsche Bank is up 2.3 percent. Banks in Germany are set to leave their credit standards largely unchanged in the second quarter, but a slight easing in credit standards is seen for lending to enterprises, especially small and medium-sized enterprises, results of the April Bank Lending Survey of the Bundesbank revealed today.
Separately, European Central Bank President Mario Draghi said that the ECB expects banks to use its liquidity injection of EUR 520 billion to refinance the real economy. "We trust that they will use it to refinance the real economy because that is the role of a banking system," he said during a hearing at the Committee on Economic and Monetary Affairs of the European Parliament.
The benchmark German DAX is currently up 73 points or 1.1 percent at 6,665, while France's CAC 40 is climbing 1.7 percent, the U.K.'s FTSE 100 is moving up 0.1 percent and Singapore's SMI is up 0.3 percent. The Euro Stoxx 50 index of eurozone bluechip stocks is rallying 1.5 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is posting a modest 0.3 percent gain.
Industrial conglomerate Siemens is adding 0.7 percent. The company cut its full-year profit forecast after reporting lower second-quarter profit on account of a major charge related to project delays at its wind-power transmission business.
Kontron AG is tumbling 3 percent after the computer systems and solutions provider reported a 43 percent fall in its first quarter earnings before interest and tax due to the unfavorable revenue and margin mix.
SAP AG is losing a percent after the world's biggest maker of business software reiterated its forecast for full-year 2012 after reporting a 10 percent rise in first-quarter profit.
Commodities are edging higher and trading in the Dow futures point to a positive start on Wall Street, as investors await the outcome of two-day Federal Reserve policy meeting for clues on the prospects of a new round of quantitative easing to bolster U.S. economic growth.
Elsewhere, Asian stocks turned in a mixed performance on Wednesday, as political concerns regarding France and the Netherlands tempered gains following a slew of strong U.S. corporate results, including Apple's forecast-beating second-quarter earnings.
by RTT Staff Writer
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