Paris: European stocks gained ground in early trade on Tuesday in a broad rally clawing back a portion of the past two sessions’ sharp losses as investor focus turned to a meeting of G-20 world leaders.
British retailer Marks & Spencer surged 11% after posting a smaller-than-expected fall in underlying fourth-quarter sales, saying it was turning around its troubled food business and holding market share in clothing.
At 0832 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 1.6% at 720.58 points. The index, which sank 3.9% on Monday, is down 14% in 2009, hit by the deepening global economic downturn as well as fears over the health of the banking system.
”The macro landscape has been stabilising, which has helped equities bounce back from historical lows. But to really improve market sentiment, we need to see the data improving and not just stabilising,” said Jacques Henry, analyst at Louis Capital Markets, in Paris.
Embattled financial group Fortis rose 6% after posting a €28 billion loss in 2008 due to massive negatives from banking activities stripped out by the Belgian and Dutch states.
The news didn’t prevent banking stocks rising, with Barclays up 2.6%, UBS up 4.5%, and BNP Paribas, which is poised to take over a big chunk of Fortis, up 1.8%.
On the downside, German carmaker Porsche fell 5.5% as the company’s net debt figure, which it released together with better-than-expected first-half results, was seen as negative.
“Net debt of €9 billion from our point of view is a clear disappointment, especially after statements by the CFO at the Geneva Motorshow some weeks ago,” DZ Bank analyst Michael Punzet said in a note.
Around Europe, Britain’s FTSE 100 index .FTSE was up 2.5%, Germany’s DAX index .GDAXI was up 1.3% and France’s CAC 40 .FCHI was up 1.5%.
Mining and energy shares were on the rise, rallying along with commodity prices. BHP Billiton rose 3.2% and Total climbed 1.1%.
The FTSEurofirst 300 .FTEU3 index of top European shares is on track to end the month of March mostly unchanged. The index, beaten down in the first part of the month, has gained nearly 12% since reaching an all-time low on 9 March.
US President Barack Obama was heading to Europe on Tuesday with a hefty agenda for tackling the economic crisis, and will stop first in London where he will attend the summit of the Group of 20 major economies on Thursday.
Investors hope the leaders will agree on further coordinated measures to revive the world economy.
Japanese Prime Minister Taro Aso was expected to outline a new stimulus plan for the world’s second-largest economy later on Tuesday as rising unemployment and falling spending showed Japan was still stuck in its worst recession in 60 years.
On the data front, investors will keep an eye on US consumer confidence monthly figures, due today. The data, which will shed light on the outlook for the recession-hit economy, is expected to have edged up in March from the record low hit in February.