Investing.com - European stocks rallied on Wednesday, as market sentiment strengthened broadly after U.S. lawmakers voted the budget bill slated to prevent the country from falling into recession.
During European morning trade, the EURO STOXX 50 surged 2.89%, France's CAC 40 rallied 1.86%, while Germany's DAX 30 jumped 1.73%.
U.S. lawmakers passed a compromise bill on Tuesday to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.
U.S. President Barack Obama hailed the deal as "just one step in the broader effort to strengthen the economy".
The U.S. president was speaking after the House of Representatives passed a Senate-backed bill by 257 votes to 167.
Financial stocks were broadly higher, as shares in French lenders BNP Paribas and Societe Generale surged 2.47% and 3.11%, while Germany's Deutsche Bank and Commerzbank jumped 2.06% and 2.72% respectively.
Peripheral lenders also posted sharp gains, as Italy's Unicredit and Intesa Sanpaolo both soared 3.08%, while Spanish banks BBVA and Banco Santander climbed 1.72% and 1.31%.
Elsewhere, ArcelorMittal rallied 3.74% after China Steel and Posco led a group that agreed to pay USD1.1 billion for a 15% stake in ArcelorMittal Mines Canada, in order to secure supplies of iron ore.
In London, commodity-heavy FTSE 100 advanced 1.54%, boosted by sharp gains in mining stocks.
Steel maker Evraz surged 4.81% and Eurasian Natural Resources jumped 4.14%, while mining giants Rio Tinto and BHP Billiton climbed 4.44% and 2.95% respectively.
Copper producers Xstrata and Kazakhmys added to gains, with shares surging 3.05% and 3.15%, while oil and gas majors Anglo American and BP rallied 3.46% and 0.85%.
Meanwhile, U.K. lenders tracked their European counterparts sharply higher. HSBC Holdings jumped 1.86% and the Royal Bank of Scotland advanced 2.68%, while Lloyds Banking and Barclays surged 3.19% and 3.91%.
In the U.S., equity markets pointed to a slightly lower open. The Dow Jones Industrial Average futures pointed to a 0.12% fall, S&P 500 futures signaled a 0.08% loss, while the Nasdaq 100 futures indicated a 0.17% decline.
Also Wednesday, Markit research group said that Spain's manufacturing purchasing managers' index declined to 44.6 in December from a reading of 45.3 the previous month. Analysts had expected the index to tick down to 45.1 last month.
Later in the day, the Institute of Supply Management was to produce a report on manufacturing growth in the U.S.
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