By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stocks rallied on Tuesday,
taking inspiration from prior-day gains in the U.S., where the Dow
Jones Industrial Average closed at its second-highest level
ever.
The Stoxx Europe 600 index added 1% to 291.87, setting it on
track for the highest closing level since summer 2008.
Shares of outsourcing company Serco Group PLC jumped 9.8%, after
the firm reported a rise in full-year profit and lifted its
dividend. See: Serco year pretax net up; dividend increased
Deutsche Post AG put on 3.9%, after the German logistics and
mailing company posted higher 2012 profit and said it expected
earnings to rise in 2013. See: Deutsche Post expects higher 2013
earnings
For the broader European stock markets, investors keyed off
gains in the U.S. and in Asia, where bourses rebounded after
tighter Chinese property mortgage rules sent markets lower.
Shanghai stocks ended 2.3% higher, while U.S. indexes nudged closer
to all-time highs. See: Stock gain lifts Dow average to 2nd highest
level
U.S. stock futures on Tuesday pointed to a higher open on Wall
Street.
Investors were also paying close attention to European
purchasing managers' indexes along with retail sales ahead of
Thursday's European Central Bank policy meeting.
The Markit euro-zone PMI composite output index came in at 47.9
in February, above an earlier estimate of 47.3 but below January's
reading of 48.6. See: Euro-zone final Feb. PMI shows deeper
downturn
Expectations of a rate cut at Thursday's meeting have been
rising in recent weeks, with some analysts seeing Tuesday's data
potentially pressuring the ECB.
Banks posted some of the biggest gains, with Standard Chartered
PLC picking up 3.3% in London, BNP Paribas SA up 1.9% in Paris and
Banco Santander SA (SAN) adding 1.3% in Madrid.
The U.K.'s FTSE 100 index climbed 0.7% to 6,392.77, while
France's CAC 40 index gained 1.5% to 3,764.24.
Germany's DAX 30 index traded 1.5% higher at 7,807.42.
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