European stocks surged higher on Tuesday, bolstered by technical support and optimism that a vote of confidence in the Greek government will pave the way for emergency aid to Athens.
If the newly shuffled government of embattled Prime Minister George Papandreou survives the vote, Greece's neighbors and the IMF are expected to come through with 12 billion euros promised for July, putting off the sovereign debt crisis for now.
Led by rebounding bank shares, the Euro Stoxx 50 index of eurozone bluechip stocks jumped 1.96 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, gathered 1.29 percent.
Unofficially, the German DAX rose 1.8 percent and the French CAC 40 gained 2.04 percent. The UK's FTSE 100 rose 1.44 percent and Switzerland's SMI was up 0.94 percent.
With the gains, European stocks pared some of the significant losses incurred during a seven-week losing skid.
Banks were lifted by hopes they will not be exposed to a Greek default. Credit Agricole added 3.25 percent, Societe General rose 3.6 percent, and UBS added 1.5 percent.
Among the DAX components, steel giant ThyssenKrupp is advanced 2.9 percent. UBS raised its price target on the stock to 38 euros from 35 euros.
Commerzbank surged 4.8 percent and Deutsche Bank is added 2.5 percent. Deutsche Bank reinitiated Commerzbank with a "Buy" rating and a price target of 4.60 euros.
Metro gained 1.7 percent after the department stores operator was raised to "Buy" from "Neutral" at Nomura.
K + S was left at "buy" with a price target of 70 euros at Equinet. Shares rose 1.3 percent.
Software AG picked up 4.5 percent in Frankfurt, after UBS upgraded the stock to "Buy" from "Neutral" and increased the price target to 45.50 euros from 37 euros.
Daimler AG had a strong 2010 and will focus on premium segments of emerging markets, its chairman said Tuesday. The stock was up more than 2 percent.
Airbus maker EADS is rising about 1 percent, as Paris hosted its major air show.
In London, Whitbread is climbed 6.9 percent after the company reported 9.2 percent growth in sales for the 13 weeks ended June 2, helped by strong performance in its coffee shop chain Costa, even as the business was hurt by the extended Easter and Royal Wedding holiday.
BP rose 3.7 percent. Swiss-based oilfield service company Weatherford International said its U.S. subsidiary has reached an agreement with BP for settlement of claims between the companies related to the Deepwater Horizon oil spill.
SABMiller fell 3.6 percent. Australian beer maker Foster's Group rejected an unsolicited $9.98 billion acquisition offer from the company. SABMiller will reportedly make another bid.
TUI Travel was up 3.5 percent after WestLB raised the stock to "Buy" from "Neutral."
Nokia gained 3.8 percent. The company unveiled the Nokia N9 smartphone and announced the launch of three new Series 40 mobile phones as part of the Finnish handset maker's efforts to regain market share amid stiff competition from Apple Inc. and Google Inc.
Stocks held up well despite a disappinting reading on German economic sentiment.
The Mannheim-based Center for European Economic Research, or ZEW, said its economic sentiment index fell more than expected, to negative 9.0 in June from a reading of 3.1 in May.
"Troubles in the euro zone as well as the feared economic downturn in the U.S. seem to weigh heavily on the mind of the financial market experts," said ZEW President Wolfgang Franz.
"Moreover, financial market experts see more and more evidence that the boom of the German economy may weaken during the months to come," he added.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.