The European markets finished to the upside again Tuesday, extending their gains from the previous trading session. The markets extended their gains following the U.S. existing home sales report. Investors were optimistic ahead of the EU summit, which will be held on Wednesday.
Shares of major banks were up again, continuing to recover from the losses from the prior week of trade. Mining stocks were up on news that China has fast tracked approvals of infrastructure projects. Automakers were also among the session's positive performers.
The global economic recovery is fragile and could be derailed by the ongoing Eurozone debt crisis, the Organization for Economic Co-operation and Development (OECD) warned in its latest economic outlook report, released Tuesday.
The Paris-based think-tank downgraded the outlook for the euro area economy. It now sees a 0.1 percent contraction in economic activity in 2012, compared to 0.2 percent growth projected in the November report.
Spain's borrowing costs continued to climb higher in the latest debt auction on Tuesday as markets remain concerned over the economic prospects of the country. The Treasury sold a total EUR 2.5 billion of 3 and 6 - month bills, slightly higher than the top target of EUR 2.5 billion set for the auction.
The country raised EUR 1.50 billion from the sale of 3-month Treasury bills. The yield on the debt rose to 0.846 percent from 0.634 percent in the previous auction on April 24. The bid-to-cover ratio, which suggests demand, fell to 3.95 from 7.61.
The Euro Stoxx 50 index of eurozone bluechip stocks gained 2.13 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.83 percent.
The CAC 40 of France climbed by 1.88 percent and the DAX of Germany increased by 1.65 percent. The FTSE 100 of the U.K. finished higher by 1.87 percent and the SMI of Switzerland rose by 1.64 percent.
In Frankfurt, Bayer finished up by 0.42 percent. Nexavar, a drug co-developed by Bayer HealthCare Pharmaceuticals Inc. and U.S. drug-maker Onyx Pharmaceuticals, failed to meet its primary endpoint in a late-stage study evaluating patients with advanced relapsed or refractory non-squamous non-small cell lung cancer.
SHW closed up by 1.38 percent. Berenberg initiated the auto dealer with a "Buy" rating.
Shares of Daimler increased by 3.20 percent. BMW climbed by 2.96 percent and Volkswagen gained 2.63 percent.
Commerzbank rose by 0.77 percent and Deutsche Bank gained 2.61 percent.
In Paris, Accor rose by 6.02 percent. The company agreed to sell its U.S. budget hotel chain Motel 6 to investment firm Blackstone Group LP for $1.9 billion.
Credit Suisse upgraded its rating on Lafarge to "Neutral" from "Outperform." The stock finished higher by 5.34 percent.
Renault increased by 6.12 percent and Peugeot climbed by 3.50 percent.
Shares of Societe Generale advanced by 4.50 percent. BNP Paribas rose by 3.42 percent and Credit Agricole gained 4.56 percent.
In London, Vodafone finished higher by 4.24 percent after the telecom giant reported better than expected annual results.
Among the miners, BHP Billiton rose by 2.56 percent and Rio Tinto added 4.02 percent. Antofagasta climbed by 4.56 percent and Vedanta Resources gained 3.87 percent.
Marks & Spencer cut its sales target. The stock ended the session higher by 1.80 percent.
Barclays increased by 4.94 percent and Royal Bank of Scotland climbed by 5.53 percent. Lloyds Banking Group finished higher by 4.52 percent and HSBC gained 1.87 percent.
CRH closed up by 4.04 percent. Credit Suisse upgraded the stock to "Neutral" from "Underperform."
HomeServe plunged by 29.24 percent after the Financial Services Authority decided to investigate certain historic issues.
Sonova sank by 9.86 percent in Zurich, after the company reported annual results.
Eurozone consumer confidence unexpectedly improved in May, after declining in the previous month, preliminary data released by the European Commission showed Tuesday. The DG ECFIN flash estimate of the consumer confidence indicator came in at -19.3, up from -19.9 in April. Economists had forecast a lower score of -20.4.
U.K. annual inflation slowed more-than-expected in April relieving the central bank governor from writing an open letter to the chancellor explaining why inflation exceeded the limit. Consumer price inflation fell to 3 percent from 3.5 percent in March, data from the Office for National Statistics showed Tuesday.
The Conference Board's leading indicator for China's economic activity increased at a steady pace in April, suggesting a modest growth ahead. Meanwhile, the underlying indicators showed some degree of weakness, sending a mixed message over the prospects of the economy. The Conference Board said its leading economic indicator increased 0.8 percent from a month earlier to 232.4 in April, following a 0.8 percent rise in March and a 1 percent gain in February.
While the National Association of Realtors released a report on Tuesday showing a rebound in U.S. existing home sales in the month of April following a decrease in the previous month, sales rose by less than economists had anticipated.
NAR said existing home sales rose 3.4 percent to an annual rate of 4.62 million in April from a downwardly revised 4.47 million in March. Economists had expected sales to climb to an annual rate of 4.66 million from the 4.48 million originally reported for the previous month.
by RTT Staff Writer
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