European stock markets closed higher yesterday, buoyed by signs EU leaders were finding broader agreement on what needs to be done to bolster the eurozone’s debt rescue system, dealers said.
They said the more positive tone from Brussels and a series of successful bond sales helped ease concerns over the eurozone debt crisis while solid corporate results and guidance added to the more optimistic tone.
At the same time, news of a sharp spike in British inflation to 3.7 per cent last December, well above the two per cent target, sparked some caution as the figures strengthened the case for an early interest rate hike.
In London, the FTSE 100 index of leading shares closed up 1.18 per cent at 6,056.43 points. In Paris, the CAC 40 added 0.94 per cent to 4,012.68 points and in Frankfurt the DAX rose 0.92 per cent to 7,143.45 points.
“After a lacklustre performance (on Monday) the FTSE 100 has got off to a strong start this morning,” said Will Hedden, a trader at IG Index.
“Both financials and mining shares have helped the index rocket back through 6,000 points. Also helping sentiment were hopes of some progress by European finance ministers in agreeing a revised rescue plan for indebted nations.
“It seems that any definite agreement for a new plan is unlikely to happen in the next few days but investors seem slightly reassured that steps are being taken to be more proactive if another country runs into trouble.”
Spain was the biggest beneficiary of the Brussels finance ministers’ meeting, with the Madrid market up 2.95 per cent, helped along as a sale of €5.5 billion in short-term bonds was done at much lower rates.
In Lisbon, considered by many analysts to be next in need of an EU bailout after Greece and Ireland last year, stocks gained 1.38 per cent.
Dealers said a very strong ZEW survey showing German financial market confidence soared this month also provided support, with Europe’s biggest and most powerful economy expected to give its neighbours a much needed lift. In New York, the blue-chip Dow Jones Industrial Average was up 0.52 per cent at around 1715 GMT while the tech-rich Nasdaq Composite was flat despite losses for Apple.
Apple shares slumped six per cent in early trade after chief executive Steve Jobs announced on Monday, when the market was closed for a public holiday, that he was taking another medi-cal leave of absence.
Apple later recovered some of the lost ground but Mr Jobs’ absence has sparked deep concerns about the future of a company he has done so much to shape.Citigroup also fell sharply after its fourth quarter and 2010 earnings fell short of market forecasts.
Elsewhere in Europe, Amsterdam was up 0.73 per cent, Brussels gained 1.38 per cent, Madrid jumped 2.95 per cent, Milan put on 1.16 per cent and Swiss stocks added 0.86 per cent.
In Asian trade earlier on Tuesday, Tokyo added 0.15 per cent; Hong Kong and Shanghai were flat while Sydney gained 0.81 per cent.