European 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 4.5 percent, Deutsche Bank is up 2.5 percent and Societe Generale is rallying 5.2 percent. Credit Suisse is trading flat despite reporting a 96 percent drop in net profit for the first quarter, mainly hurt by fair value losses of CHF 1.55 billion before taxes resulting from a significant tightening in own credit.
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 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. Around Europe, France's CAC 40 is climbing 1.6 percent, the German DAX is moving up 1.2 percent, the U.K.'s FTSE 100 is edging up 0.2 percent and Switzerland's SMI is up 0.3 percent.
Remy Cointreau is rallying 2.3 percent in Paris, a day after the French spirits group reported a 15.6 percent rise in organic sales growth for the year through March 31. ABB is tumbling 3 percent after the Swiss engineering firm reported a 5 percent rise in first-quarter profit and said it was looking for profitable growth in 2012.
German software maker SAP is losing a percent in Frankfurt despite reporting better than expected first quarter results. The company also said it expects non-IFRS software and software -related service revenue to increase in the range of 10-12 percent for the full year and 14-16 percent for the second quarter.
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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