Europe close: Stocks bounce back noticeably
Posted on: 19 Nov 2012 by Polly York

-Obama confident that fiscal cliff will be avoided
-Egypt PM says Israel/Gaza truce may be near -Reuters
-Germany says extra time to negotiate EU budget a possibility -Bbg
-German government spokesman says not to expect Greece decision tomorrow -Bbg
-Spanish banks’ bad loan ratio rose to 10.7 per cent in August from 10.52 per cent

FTSE-100: 2.36%
Dax-30: 2.49%
Cac-40: 2.93%
FTSE-Mibtel 30: 3.05%
Ibex 35: 2.31%
Stoxx 600: 2.18%

European stocks staged their largest rise in 10 weeks today, at the start of what is to be a holiday shortened week Stateside (with the attendant diminished trading volumes), due to the Thanksgiving Day celebrations.

Helping markets move higher today is a bevy of positive news. Chief amongst these, over the weekend leading US lawmakers waxed optimistic that a deal on avoiding the fiscal cliff will be reached, followed by early afternoon reports that a diplomatic breakthrough in Gaza is possible.

Furthermore, speaking to German broadcaster ARD the country’s Finance Minister, Wolfgang Schaeuble, indicated this past weekend that an agreement on giving Greece access to the next tranche of aid will be reached tomorrow. As well, and contrary to earlier remarks, ‘he now appears to be open to adding about EUR 14 billion over the next two years to the funds already committed to Greece, to close the financing gap up to 2014,’ added economists at Barclays Research.

While a government spokesman later denied that an agreement is imminent those remarks are, never the less, positive.

Having said that, and for her part, International Monetary Fund (IMF) managing director Christine Lagarde said she will push for a permanent solution to Greece’s debts so as to avoid prolonged uncertainty.

Santander will invest in Spanish ‘bad bank’

Shares of SAS AB flew the highest after Scandinavia’s largest airline got the backing of the majority of its unions for a cost-cutting plan.

Shares in German construction group Hochtief moved higher after the company announced the possible exit of its Chief Executive officer, Frank Stieler, from the executive board, which may herald an imminent move by parent company ACS to take over the entire firm.

Spain’s Santander is planning to invest in the country’s so-called ‘bad bank,’ which constitutes a positive sign for the country’s financial system.

Spanish oil major Repsol hopes to reach an agreement with the Argentinian government regarding compensation for the nationalisation of Repsol’s YPF subsidiary, according to published reports on Sunday.

ING rose by 4% after the commission extended the company’s deadline to sell its insurance businesses.

From a sector stand-point the best performance is now to be seen in the following sectors within the DJ Stoxx 600: Automobiles (3.78%), Banks (3.62%) and Construction&Materials (2.96%).

Foreign orders for Italian goods drop sharply

Italian industrial orders fell by 4% in September (Consensus: -1%), after a decrease of 0.7% in the previous month, led by a 7.4% fall in foreign orders.

Eurozone construction output fell by 1.4% month-on-month in September, after an 0.6% fall in the previous month.

Crude rises on tensions in Gaza

The euro/dollar is now rising by 0.48% to the 1.2804 dollar mark.

Front month Brent crude futures are up by 2.523 to the 111.76 dollar mark on the ICE.

AB

Tags: barclays | bevy | early afternoon | extra time | german broadcaster | german government | international monetary fund | permanent solution | tranche | wolfgang schaeuble