European Markets Higher as Confidence Gets a Boost


LONDON -- Stock markets have trading higher in Europe Tuesday, although volumes remain thin during the summer period. Confidence surrounding European peripheral countries has begun to return after Spain's borrowing cost slid in an auction of 12- and 18-month notes this morning. Meanwhile, attention is turning to Jean-Claude Juncker, Luxembourg's prime minister and head of the European finance ministers. Tomorrow Juncker will visit Greece, where he will listen to a request for a two-year extension of the country's fiscal adjustment program.

The French market is seeing some of the strongest gains today: The CAC 40 (INDEX: ^FCHI) is up more than 0.5%.

As always, the following price moves are based on this morning's European trading.

With a return of risk appetite today, financial stocks on the continent are generally seen making good headway. In Germany, Deutsche Bank (NYS: DB) is leading gains, albeit on light trading, up 2.5% amid news that the country's banks are pushing for the European Central Bank to have sole responsibility for regulatory supervision in Europe.

Elsewhere, Dutch lender ING Groep (NYS: ING) is up almost 3%, bolstered by two successful 10-year bond sales during the past few days that allowed it to raise 17 billion euros. This followed the sale of two 20-year, zero-interest, U.S.-denominated bonds last week, which saw the company raising an additional $60 million.

Last week the European antitrust body warned ING that its proposed alternative to the divesting of its Dutch mortgage arm, WestandUtrecht -- which would have seen a slimmed-down version of the unit being incorporated into ING's insurance business -- was not likely to pass European competition laws.

On a more negative note, Telekom Austria (NASDAQOTH: TKAGY.PK) is down 3.3% as concerns over potential shortfalls in profit and sales continue to weigh on the stock. The company has been subject to sharp declines in recent days, hitting an 11-year low as more than eight banks and brokerages reduced their respective performance targets for the stock during the last week following the company's reduced profit and revenue numbers.

Meanwhile, German exchange Deutsche Boerse (NASDAQOTH: DBOEY.PK) is down 1% after rival firm CME Group said it plans to set up a derivatives exchange in London that will directly compete with Deutsch's Eurex exchange. CME's CEO, Phupinder Gill, said the company will set up a derivatives market called CME Europe in the British capital by the middle of 2013, starting with currency futures covering the G7 countries.

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