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European stocks open higher, focus on Cyprus developments; Dax up 0.65%

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Investing.com - European stocks opened higher on Wednesday, as markets were eyeing developments in Cyprus after the country's parliament rejected a proposed bank deposit tax, which formed part of a EUR10 billion international bailout deal.

During European morning trade, the EURO STOXX 50 gained 0.77%, France's CAC 40 jumped 0.89%, while Germany's DAX 30 advanced 0.65%.

Cyprus's President Nicos Anastasiades called an emergency meeting with political leaders to look at alternatives after parliament rejected the terms of the bailout agreement.

Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.

German Finance Minister Wolfgang Schaeuble warned Cyprus that its banks might never be able to reopen if it rejected the bailout.

Sentiment improved however, amid growing expectations that the European Union will renegotiate a deal with Cyprus to keep the country in the euro zone.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale jumped 1.73% and 1.76%, while Germany's Deutsche Bank and Commerzbank rallied 2.53% and 1.43% respectively.

Peripheral lenders added to gains, with Italian banks Intesa Sanpaolo and Unicredit climbing 0.51% and 1.13%, while Spain's BBVA and Banco Santander advanced 0.55% and 0.71%.

In London, commodity-heavy FTSE 100 climbed 0.45%, supported by gains in mining stocks.

Mining giants BHP Billiton and Rio Tinto gained 0.77% and 1.34% respectively, while rival company Vedanta Resources surged 2.07%.

Copper producers Xstrata and Kazakhmys were also on the upside, with shares rallying 1.38% and 1.86%.

Meanwhile, financial stocks were mixed, as shares in Barclays rose 0.31% and the Royal Bank of Scotland advanced 0.65%, while Lloyds Banking and HSBC Holdings slipped 0.06% and 0.16% respectively.

Elsewhere, insurer Aviva plummeted 2.15% amid reports that almost 1,500 jobs could be lost if the company pulls out of Perth, Scotland. The firm was said to be considering relocating to Glasgow when the lease on its Pitheavlis office expires in 2014.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.28% rise, S&P 500 futures signaled a 0.32% increase, while the Nasdaq 100 futures indicated a 0.53% gain.

Investors were looking ahead to the outcome of the Federal Reserve's policy meeting later in the trading day, after data last week showing that U.S. inflation was contained left the way clear for the bank to continue its asset purchase program.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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