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European stocks rise; banks up on US stress tests

European stocks rise; banks up on US stress tests
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First Published: Fri, May 08 2009. 02 11 PM IST
Updated: Fri, May 08 2009. 02 11 PM IST
London: European shares climbed 1% early on Friday as financial stocks advanced after the results of stress tests on US banks showed no nasty surprises, while miners tracked higher metals prices.
At 12:45pm, the FTSEurofirst 300 index of top European shares was up 1% at 859.88 points after closing 0.8% lower in the previous session. It hit a four-month high of 878.08 on Thursday.
Commerzbank jumped 5% as it unveiled a revamped board structure and restructuring programme after reporting a bigger-than-expected net loss.
Royal Bank of Scotland rose 4.8%. The part-nationalised lender fell to a small first-quarter loss after bad debts quadrupled and it took another £2.1 billion ($3.2 billion) writedown on risky assets.
Investors breathed a sigh of relief after the results of stress tests and looked ahead to employment data that may offer further hope the global slump is bottoming out.
US regulators ordered top banks to raise nearly $75 billion in capital - a sum seen by analysts as relatively modest - to bolster their ability to withstand further shocks to the financial system.
“This (stress test results) could be seen by many as the last hurdle for the markets to continue their stellar bull run,” said Chris Hossain, senior sales manager at ODL Securities Ltd.
“Markets tend to show where we should be in eighteen months time, and for the time being, a sense of optimism is in the air.”
Miners rose as metals prices increased. BHP Billiton, Anglo American, Antofagasta, Rio Tinto, Xstrata and Eurasian Natural Resources were up 0.6-4.5%.
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First Published: Fri, May 08 2009. 02 11 PM IST
More Topics: Markets | Europe | Stocks | Shares | US |