The European markets finished firmly in positive territory on Monday. Investors are hopeful that Eurozone policy makers will act decisively to resolve the region's debt crisis. European Central Bank President Mario Draghi stated last week that the ECB is ready to do whatever it takes to preserve the euro.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti have vowed to defend the euro amid escalating tensions in Eurozone, close on the heels of a similar agreement between Merkel and French President Francois Hollande.
During a telephone conversation on Sunday, Merkel and Monti agreed that both the countries "will do everything possible to protect the euro area," reports said.
Italy and Spain saw their borrowing costs ease on Monday as investor confidence improved on hopes of some crucial action from the European Central Bank, which holds its rate-setting session later this week.
The yield on the 10-year Italian bond dropped to 5.96 percent from 6.19 percent on June 28. The 5-year debt fetched a yield of 5.29 percent, down from 5.84 percent at the previous sale on June 28. Elsewhere, Spanish 10-year bond yield fell to 6.59 percent in the secondary market.
Spanish economic output sank further in the second quarter, deepening the recession in the euro area's fourth largest economy, which is already hit by a banking sector crisis and the government's tough austerity measures.
The gross domestic product fell 0.4 percent in the second quarter of 2012 after a 0.3 percent decline in the first quarter of 2012 and in the fourth quarter of 2011. The outcome was in line with the Bank of Spain's estimates released early last week.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.68 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.66 percent.
The DAX of Germany climbed by 1.27 percent and the CAC 40 of France gained 1.24 percent. The FTSE 100 of the U.K. rose by 1.22 percent and the SMI of Switzerland finished up by 0.62 percent.
In Frankfurt, Henkel fell by 0.22 percent. Societe Generale downgraded its rating on the stock to "Hold" from "Buy."
S&P Equity raised Rhoen-Klinikum to "Hold" from "Strong Sell." The stock climbed by 0.03 percent.
In Paris, Credit Agricole increased by 6.85 percent. BNP Paribas and Societe Generale advanced by 3.71 percent and 3.58 percent, respectively.
Air France-KLM surged by 17.59 percent. The company reported a sharply wider second-quarter loss, but added that it expects to benefit from the first positive effects of its cost-savings program in the second half of the year.
S&P Equity lowered its rating on Saint Gobain. The stock finished higher by 2.10 percent.
JC Decaux dropped by 7.92 percent, after reporting first-half results.
Air Liquide fell by 0.14 percent. The industrial gas maker reported a 5 percent growth in profit for the first half of the year, adding that it continues to aim for growth in net profit in 2012, assuming that there is no major economic downturn.
In London, HSBC gained 2.73 percent after reporting first-half results. Barclays climbed by 2.66 percent after Societe Generale raised its rating on the stock to "Buy" from "Hold." Royal Bank of Scotland finished higher by 3.82 percent.
Ryanair increased by 2.28 percent. The low-cost airline reported over 29 percent drop in profit for the first quarter, as higher fuel costs more than offset an 11 percent rise in revenues. The company said its outlook remains cautious for the year, while remaining unchanged.
Vedanta Resources climbed by 3.57 percent and Rio Tinto gained 1.76 percent. Kazakhmys finished up by 3.58 percent and Antofagasta rose by 2.06 percent. Fresnillo closed higher by 2.68 percent and Xstrata added 3.40 percent.
Reckitt Benckiser lost 0.42 percent. The company reported a marginal decline in its second-quarter revenue, but said it is confident of achieving its full-year 2012 target of 200 basis points above its market growth rate of 1 to 2 percent.
Eurozone economic sentiment deteriorated more-than-expected in July due to lower confidence in all sectors and marked the fourth consecutive month of downturn. The economic sentiment index fell to 87.9 from 89.9 a month ago, survey data from the European Commission showed Monday. The reading was also below expectations for a score of 88.9.
German wholesale trade turnover rebounded in June after declining for the past three months, the latest figures from the Federal Statistical Office showed Monday. Wholesale sales increased 4 percent year-on-year in June following a 2.8 percent fall in May. In March and April, sales fell 1.1 percent and 0.9 percent respectively.
by RTT Staff Writer
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