European stocks rose sharply on Wednesday and the euro edged higher against both the U.S. dollar and sterling, buoyed by increased optimism that Greek lawmakers will pass austerity measures, crucial to win EU/IMF aid and a new bailout package to avert a sovereign debt default. Basic resources stocks led the gainers as oil and metal prices advanced.
Global miner BHP Billiton saw its shares gain 1.9 percent, while rival Rio Tinto advanced 1.5 percent. Copper producer Antofagasta climbed 3.8 percent following upbeat comments by its CEO Jean Paul Luksic that there is "huge demand" for metals from China and other emerging markets.
The Euro Stoxx 50 index of euro zone blue chippers is climbing 1.52 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is up 1.2 percent. Around Europe, the German DAX is gaining 1.54 percent, France's CAC 40 is adding 1.41, the U.K.'s FTSE 100 is up 1.1 percent and Switzerland's SMI is moving up 1.46 percent.
Banking stocks are also rising sharply amid expectations that a vote on austerity measures will pass successfully later in the session. BNP Paribas, Societe Generale and Cmmerzbank are among the prominent gainers. Europe's largest insurer Allianz is up over 2 percent after Morgan Stanley upgraded the stock to 'overweight'.
The Greek government will attempt to pass a vote on a EUR28 billion austerity package today to qualify for another bailout from the European Union and International Monetary Fund. Greek Socialist deputy Thomas Robopoulos said that he would vote to support the government's five-year austerity plan, after earlier expressing opposition to the package.
Meanwhile, it would be 'suicide' if the government fails to pass the austerity measures in parliament, the Financial Times quoted Bank of Greece Governor George Provopoulos as saying. In an interview with the business daily, Provopoulos expressed concern that Greek politicians had played down the crisis over the past 18 months, which has eventually led towards a possible default.
On the macroeconomic front, eurozone economic confidence deteriorated in June, survey results from the European Commission showed . The economic sentiment index fell to 105.1 from 105.5 in May versus expectations for a drop to 105.
Greece's producer price inflation, meanwhile, slowed for the second straight month in May, with the producer price index increasing 7.3 percent annually in May, slower than the 8.2 percent increase seen in April, according to data released by the Hellenic Statistical Authority.
Most Asian stocks rose for a second consecutive session on Wednesday, with signs that Greece may avoid a default on its debt, gains on Wall Street for the second day in a row overnight and strong industrial production data from Japan underpinning sentiment.
Japan's Nikkei average closed 1.5 percent higher at a seven-week high, as a weaker yen against both the euro and the U.S. dollar and growing optimism for a viable solution to the Greek debt crisis lifted exporter shares such as Canon and Honda Motor.
Data released today showed the nation's industrial output rose at the fastest monthly pace in more than 50 years in May, as production continued to recover after the March 11 catastrophes. According to data released by the Ministry of Economy Trade and Industry, industrial production rose 5.7 percent in May compared to April, the biggest gain since 1953.
China's benchmark Shanghai Composite index fell 1.1 percent, with banks and property developers leading the declines, amid fears the central bank has more interest rate hikes in the offing.
The Dow futures are currently rising 34 points, while crude futures are firm at $93.47 a barrel after rising more than 2 percent overnight, buoyed by a weaker dollar and data showing a decline in the U.S. crude inventories. Crude oil inventories dropped by 2.7 million barrels to 360.3 million last week, while gasoline stockpiles declined 91,000 barrels to 211.8 million, a report from the American Petroleum Institute released late Tuesday showed.
The major U.S. averages closed up between 1.2 percent and 1.5 percent overnight, with continued optimism about the likelihood of a resolution to the Greek debt crisis generating buying interest.
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