By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose on
Wednesday, after a slide in German business confidence added to
speculation the European Central Bank could cut rates at its
meeting next week.
Additionally, earnings from corporate heavyweights helped lift
sentiment.
The Stoxx Europe 600 index rose 0.3% to 293.37, after putting in
its best daily performance since last summer on Tuesday.
Peugeot SA shares rallied 9.1%, after the car maker said it may
cut costs if the European automobile market is worse than expected
in 2014.
On a more downbeat note, Heineken NV lost 6.7%, after the brewer
said it sees volume pressure in all regions as it posted a group
beer volume decline of 2.7% in the first quarter.
For the broader European stock markets, investors digested a
downbeat reading on German business confidence, which sparked
expectations the ECB could cut rates by 25 basis points at its
policy-setting meeting next Thursday. The Ifo business-climate
index fell to 104.4 points in April from 106.7 in March for a
second month of declines, missing expectations of a 106.2
reading.
The downbeat data came after a day after purchasing manager's
indexes for the euro zone signaled a weak start to the second
quarter, with the downturn spreading to powerhouse Germany.
"It all tells the same story -- things are pretty tough out
there and the weakness is spreading to the core. Not in a drastic
way, but it's adding to the grinding weakness. It makes the case
for a rate cut, but the benefits are questionable," said Neil
Wilkinson, senior fund manager at Royal London Asset
Management.
"The last three to four years of low rates have had a limited
impact on the broader economy because the transmission is not
working properly. It doesn't filter through to the real economy,"
he said.
In Asia, most markets closed higher, with Japanese stocks
climbing amid expectations of improved earnings growth.
U.S. stocks pointed to a higher open on Wall Street, putting
them on track for a fourth-straight day of gains.
Among country-specific indexes in Europe, France's CAC 40 index
rose 0.7% to 3,809.79. Shares of AXA SA climbed 1.8%, after
Citigroup added the insurance firm to its Europe focus list.
In Germany, Deutsche Post AG climbed 4.4%, after J.P. Morgan
Cazenove lifted the firm to overweight from neutral and added it to
its European analyst focus list, citing year-to-date
underperformance.
The DAX 30 index rose 0.6% to 7,704.76
The U.K.'s FTSE 100 index gained 0.3% to 6,423.21. Standard Life
jumped 8.6%, after posting a better-than-expected 24% rise in sales
for the first quarter, boosted by strong performances in the U.K.
and Canada.
Barclays PLC shares (BCS) slipped 1.2%. The bank posted a
first-quarter net profit of 839 million pounds ($1.28 billion)
compared to a loss of GBP598 million in the same quarter last year,
but said earnings were hit by GBP514 million in restructuring
charges.
Outside the major indexes, shares of Storebrand ASA jumped 9.2%,
after the insurance firm said it strengthened its buffer
capital.
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