The German market is notably higher in afternoon trading Wednesday, ahead of the interest rate decision from the European Central Bank. The Asian stocks mostly rose, buoyed by hopes of intervention from central banks, including the Federal Reserve, to boost economic growth.
The European Central Bank is set to announce its monetary policy decision at 7.45 am ET, with economists expecting a 25 basis point one-off cut to 0.75 percent.
The leaders of the seven industrialized nations discussed the situation in Eurozone at an emergency meeting called on Tuesday but announced no joint action. Meanwhile, Spanish Treasury Minister Cristobal Montoro said the country's banks may need European assistance as the capital markets were closing before euro area's fourth biggest economy.
Meanwhile, Moody's Investors Service on Tuesday downgraded six German banks, including Commerzbank, citing increased risk of further shocks emanating from the eurozone debt crisis and the limited capacity of the banks to absorb losses.
The ratings agency also downgraded Austria's three largest banks, citing their vulnerability to the adverse operating conditions in some of their core markets in Europe.
The Euro Stoxx 50 index of eurozone bluechip stocks is climbing 2.2 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 1.5 percent.
The DAX index opened higher and is currently adding 1.7 percent.
Deutsche Boerse is climbing 3.6 percent. HeidelbergCement is adding 3.2 percent.
BMW is gaining 2 percent. Volkswagen is adding 1.1 percent and Daimler is up 1.2 percent.
Car parts maker Rheinmetall is surging 5.9 percent after Berenberg raised the stock to "Buy" from "Hold."
Deutsche Bank is advancing 1.3 percent and Commerzbank is gaining 0.8 percent.
Merrill Lynch removed Allianz from its "Most Preferred List." The stock is climbing 1.8 percent.
Air Berlin, Germany's second-largest airline, said capacity utilization rose 0.6 percentage points in May, while the company reduced its capacity by 7.2 percent. The stock is up 0.6 percent.
Heidelberger Druckmaschinen is surging 7.5 percent. HSBC raised its rating on the stock to "Neutral" from "Underweight."
Elsewhere in Europe, the French CAC 40 is climbing around 2 percent and Switzerland's SMI is gaining 1.1 percent. The UK's FTSE 100, which opened for trading this week after a two-day holiday for the Queen's Diamond jubilee festivities, is rising 1.4 percent.
In economic news, Germany's industrial production decreased more than expected in April, the Federal Ministry of Economy and Technology said. Industrial production fell 2.2 percent in April from a month ago, offsetting March's revised 2.2 percent increase. Economists were expecting a 1 percent fall for April.
The Eurozone economy stagnated in the first quarter, revised data from Eurostat showed, confirming that the single-currency bloc has escaped a fall-back into recession. The gross domestic product remained flat compared to the previous quarter after shrinking 0.3 percent in the fourth quarter of 2011.
Across Asia/Pacific, Australia's All Ordinaries gained 0.30 percent, Hong Kong's Hang Seng climbed 1.4 percent and Japan's Nikkei 225 added 1.8 percent. However, China's Shanghai Composite Index edged down 0.1 percent.
In the U.S., futures point to a higher open on Wall Street. In the previous session, stocks moved mostly higher over the course of the trading day after showing a lack of direction earlier in the session. The major averages ended the day in positive territory, although the Dow underperformed its counterparts. The Dow edged up 0.2 percent, while the Nasdaq rose 0.7 percent and the S&P 500 climbed 0.6 percent.
In the commodity space, crude for July delivery is gaining $1.17 to $85.46 per barrel and August gold is advancing $19.9 to $1636.8 a troy ounce.
by RTT Staff Writer
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