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European Markets Climbed On German Data & Earnings

The European markets ended Tuesday's session in positive territory. Investor sentiment received a boost from the better than expected German GfK consumer sentiment report and the continued gains in Eurozone economic confidence. Investors were also confronted by a large number of earnings reports Tuesday, the results of which were mixed.

The European Central Bank, the Bank of England and the U.S. FOMC will all hold policy meetings this week. Investors will also be watching for the release of the U.S. GDP data on Wednesday and the U.S. jobs report for July at the end of the week.

The International Monetary Fund on Monday approved a loan tranche worth EUR 1.72 billion for Greece after a fourth review of the struggling Eurozone member state. Last week, Greece completed the adoption of reforms that are required to receive bailout payments from the country's international lenders.

The IMF Executive Board also waived three end-June performance criteria —the overall stock of government debt, government domestic arrears, and the general government balance— on which the data are not yet available.

It also decided to forgo the requirement of a modification of the end-September performance criterion on privatization receipts.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.68 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.04 percent.

The DAX of Germany climbed by 0.15 percent and the CAC 40 of France advanced by 0.45 percent. The FTSE 100 of the U.K. rose by 0.16 percent, but the SMI of Switzerland fell by 0.05 percent.

In Frankfurt, Infineon Technologies declined by 4.11 percent. The chipmaker posted lower third-quarter net income of 77 million, but raised its sales forecast.

Deutsche Bank tumbled by 4.00 percent. The lender reported about a 50 percent fall in second-quarter profit on the back of hefty litigation-related charges and higher provision for bad loans.

Linde gained 1.36 percent, following its second quarter report.

K+S plunged by 23.17 percent, after Russia's Uralkali pulled out of a venture with its potash partner in Belarus. The move is expected to cause global prices to drop by 25%.

In Paris, Valeo SA rose by 4.15 percent. The auto parts maker raised its 2013 earnings target.

Alcatel Lucent surged by 14.41 percent, after its second quarter report. The company announced plans to find strategic partners.

Electricite de France advanced by 7.34 percent, after its strong half year report.

In London, BP Plc sank by 3.41 percent. The oil giant reported lower underlying replacement cost profit for the second quarter, amid a drop in oil prices and a high underlying effective tax rate.

Aberdeen Asset Management fell by 3.90 percent, after Morgan Stanley downgraded it to "Equal weight" from "Overweight."

Barclays dropped by 5.74 percent, after the lender announced its intention to raise approximately 5.8 billion pounds, net of expenses, by way of a rights issue.

GKN increased by 6.54 percent, following the release of its results for the first half of the year. The company also stated that it expects a stronger performance in the second half of the year.

ITV surged by 6.30 percent, after its profit for the first half of the year rose by 15 percent.

Weir Group rose by 4.19 percent, after it reported its half year results. The company also said it expects to meet its full year targets.

Next advanced by 2.41 percent, after it increased its full year profit forecast.

Clariant gained 2.83 percent in Zurich. The specialty chemicals maker reported increased profit for the second quarter and backed its forecasts for 2013 despite rising uncertainties in emerging markets.

UBS climbed by 2.31 percent. The banking giant reported a 32 percent increase in second-quarter profit, helped by strong performance in its investment banking unit.

Eurozone economic confidence strengthened for a third month to a 15-month high in July, driven by improved sentiment among consumers, business leaders, service providers and retailers, boosting hopes of a recovery.

The economic confidence index improved to 92.5, the highest since April last year, from 91.3 in June, survey data from the European Commission showed Tuesday. The reading matched economists' estimate.

Sentiment among German consumers is set to rise to its highest level in almost six years heading into August, as households' propensity to buy improved along with an increase in their economic and income expectations at the start of summer, a survey report from market research firm GfK revealed Tuesday.

The forward-looking consumer confidence index posted 7 in August, up from 6.8 in July. A higher value was last recorded in September 2007, when the indicator was at 7.3. Economists had expected a more modest increase to 6.9.

Germany's EU harmonized inflation stayed unchanged in July, contrary to economists' forecast for a slowdown, latest data showed Tuesday.

Inflation, as per the harmonized index of consumer prices (HICP), was 1.9 percent in July, unchanged from the June figure, the Federal Statistical Office said. Economists had forecast inflation to ease to 1.8 percent.

Spanish recession eased in the second quarter of 2013 as improving external demand contributed positively to the overall economic output, preliminary estimates from the statistical office INE revealed Tuesday.

Gross domestic product contracted 0.1 percent quarter-on-quarter in the second quarter of 2013, slower than a 0.5 percent fall in the first quarter. The outcome was in line with economists' expectations.

Home prices in major U.S. metropolitan areas saw continued growth in the month of May, according to a report released by Standard & Poor's on Tuesday. The report said the S&P/Case-Shiller 20-City Composite Home Price Index jumped by 2.4 percent on a non-seasonally adjusted basis in May compared to a revised 2.6 percent increase in April.

Economists had been expecting prices to increase by 2.0 percent compared to the 2.5 percent growth originally reported for the previous month.

With consumer expectations regarding the short-term outlook weakening in July, the Conference Board released a report on Tuesday showing that U.S. consumer confidence for the month fell by more than economists had anticipated.

The Conference Board said its consumer confidence index dropped to 80.3 in July from a revised 82.1 in June. Economists had been expecting the index to dip to 81.0 from the 81.4 originally reported for the previous month.

by RTTNews Staff Writer

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