Tomahawk, WI 10/5/2011 (PennyPayDay) – The European markets gained for the first time in four days, as investors cheered reports that policy makers are examining ways to safeguard their banks from the sovereign debt crisis. Asian markets were mixed, while the U.S. index futures are higher.European commissioner for economic affairs Olli Rehn told the Financial Times on Tuesday that there is a need for concerted, co-ordinated approach in Europe to resolve the debt crisis. "Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty," Rehn told the newspaper.
Meanwhile, Moody's Investors Service downgraded Italy's government bond ratings by three notches to A2 from Aa2, with a negative outlook, citing material increase in long-term funding risks for euro area sovereigns with high levels of public debt.
The Euro Stoxx 50 index of eurozone bluechip stocks is advancing 3.12 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 2.15 percent.
The German DAX is advancing 3.91 percent and the French CAC 40 is gaining 3.00 percent. The UK's FTSE 100 index is advancing 2.24 percent and Switzerland's SMI is rising 1.06 percent.
Among the DAX components, Deutsche Bank is leading the gainers by adding 3.6 percent. Commerzbank is rising 0.11 percent.
Allianz and MunichRe are advancing 3.5 percent and 2.3 percent, respectively. Deutsche Boerse is gaining 2.6 percent. Steel firm ThyssenKrupp is adding 2.2 percent.
Infineon Technologies is adding 2 percent. ING raised the stock to "Buy" from "Hold." SAP is gaining 1.7 percent. UBS cut its price target on the stock.
Volkswagen is advancing 1.9 percent, BMW is adding 1.6 percent and Daimler is moderately up.
HeidelbergCement is declining 1.6 percent after JPMorgan reduced its price target on the shares to 33.10 euros from 56.60 euros.
Rheinmetall is adding 1.6 percent, although Cheuvreux and Citigroup reduced their price targets on the shares.
Vossloh is climbing 4.5 percent, despite Commerzbank reducing its price target.
Evotec is surging about 5 percent. The drug firm said it has entered into a second multi-year, multi-target drug discovery collaboration with Brussels, Belgium-based UCB in the field of immunology.
In Paris, Credit Agricole is leading the gainers by climbing 8.25 percent. BNP Paribas and Societe Generale are advancing 6.5 percent and 5.4 percent, respectively.
Alcatel Lucent is climbing 7.1 percent and Axa is rising 5.5 percent. Cap Gemini is adding about 6.7 percent, while STMicroelectronics is up about 2 percent. Lafarge is surging 5.4 percent and Saint-Gobain is gaining 5.1 percent. Vallourec is rising 5.9 percent. Renault is adding 3.4 percent, while Peugeot is advancing 2.2 percent.
EADS is adding 2.6 percent.
In London, miners Anglo American, Antofagasta, Eurasian Natural Resources, Kazakhmys, Vedanta and Xstrata are notably higher. BHP Billiton, Rio Tinto and Xstrata are rising about 5 percent each.
Lenders HSBC, Barclays, Lloyds Banking and Royal Bank of Scotland are advancing between 1.1 percent and 2.9 percent. BP is gaining 2.7 percent, while Royal Dutch Shell is advancing 2.9 percent. Sainsbury is rising 4.2 percent. The grocery retailer said its total sales and like-for-like sales increased in the second quarter, mainly due to strong general merchandise and clothing performance, amid a tough consumer environment.
Meanwhile, Tesco reported a higher profit for the first half of the year, helped by growth in the U.S., Europe and Asia, despite subdued demand in the UK. Looking ahead, the company said it is "broadly comfortable" with current market consensus forecasts for 2011/12. The stock is up 0.5 percent.
Burberry and GKN are climbing 4.7 percent each. Taylor Wimpey is surging 7 percent and Barratt Developments is climbing 7.8 percent. HSBC reportedly upgraded its view on the U.K. house builders.
Inmarsat is declining 4.6 percent. Retailers Kingfisher, Next and Marks & Spencer are in negative territory. Dexia is adding 8.6 percent in Brussels. Banco Santander is up 1.9 percent in Madrid and BBVA is rising 2.1 percent. Holcim is climbing 5.8 percent in Zurich. Syngenta is gaining 2.6 percent.
On a busy day for economic news, activity in Germany's service sector declined unexpectedly in September, final data from a survey by Markit Economics showed. The seasonally adjusted business activity index for the services sector came in at 49.7 in September, lower than 50.3 reported in the flash estimates and August's reading of 51.1.
French private sector growth eased to its weakest level in 26 months in September. The final composite output index, that measures activity in both manufacturing and services, fell to 50.2 in September from 53.7 in August. The September reading was below the flash estimate of 50.7.
Eurozone retail sales declined in August on weak non-food product sales, data from Eurostat showed. Retail sales were down 0.3 percent month-on-month in August, reversing a 0.2 percent rise in July. The August figure came in line with economists' expectations. Eurozone's composite output index fell slightly more than initially expected in September, Markit Economics said.
U.K.'s economic growth for the second quarter was revised down to 0.1 percent from 0.2 percent sequentially, data from Office for National Statistics said. Meanwhile, activity in U.K's service sector in September grew more than economists expected to 52.9 in September from 51.1 in August, which was the lowest reading in eight months.
In the commodity space, crude for November delivery is adding $2.32 to $77.99 per barrel, while December gold is sliding $1.9 to $1617.9 a troy ounce.
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