By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets reversed in
afternoon action on Tuesday and steered toward another day at
multiyear highs, taking inspiration from the U.S. where markets
climbed after top hedge-fund manager David Tepper said he remains
bullish.
The Stoxx Europe 600 index added 0.2% to 305.01, on track to
close at the highest level since June 2008.
Shares of Severn Trent PLC soared 12%, after the water-utility
firm said it received a "very early stage" bid approach, although
no proposal has been made.
Deutsche Post AG gained 3.6%, after the company reported a rise
in first-quarter adjusted profit of more than 45%.
The broader European stock markets erased earlier losses after
U.S. markets showed positive moves, after Tepper told CNBC that
he's "definitely bullish" on stocks and that "every place is the
place to be in stock markets around the world."
Most indexes in Europe traded in negative territory in the
beginning of the session, as investors were looking at economic
data in Germany. The ZEW economic sentiment indicator, a gauge of
investor confidence, inched 0.1 point higher to 36.4 in May, but
still well below the 40 print expected by analysts. The reading
comes after the index slumped to 36.3 in April, stoking worries
about Germany's economic performance and the country's ability to
pull the rest of Europe of sluggish growth.
"Despite mostly positive economic data for the German economy,
the ZEW Indicator remains at the level of the previous month. This
may be due to the still poor economic situation in the euro zone,
that is also reflected by the recent ECB interest-rate cut", said
ZEW President Clemens Fuest, in the release.
German trade data and industrial-production figures released
last week beat market expectations, fueling hopes the economy is
picking up after a soft patch earlier in the year.
Meanwhile, industrial production in the euro zone climbed 1% in
March compared with February, helped by a solid rise in energy
production and durable consumer goods. Analysts expected a rise
around 0.4%.
"The increase in IP over the past two months represents the
first back-to-back gains in output since July/August last year.
This set of data is, therefore, an encouraging sign of a possible
stabilization in output," James Ashley, senior European economist
at RBC Capital Markets, said in a note.
"However, we caution that the details of the report are a little
more mixed than the headlines might suggest, with much of the
strength on the month coming from the (erratic) energy sector," he
added.
The report came a day ahead of the first estimate of economic
growth in the euro zone for the first quarter, with most analysts
expecting to see the region remaining in contraction.
The DAX 30 index rose 0.6% to 8,328.04 in Tuesday's trade,
flirting with a fresh all-time high.
Banks were posting losses in Germany, with Commerzbank AG down
4.5%, after announcing a 2.5 billion euro ($3.25 billion) capital
increase to repay German state aid and boost the bank's equity
capital. The price of the new shares will be EUR4.5 a share, a 55%
discount to Monday's closing price.
In France, European Aeronautic Defence & Space Co. rose
2.9%, after the firm kept its earnings guidance for 2013, but
reiterated that the Airbus A350XWB long-range aircraft program
remains "challenging."
The CAC 40 index put on 0.2% to 3,954.84.
The U.K.'s FTSE 100 index fell 0.6% to 6,670.48, poised for a
ninth straight day of gains.
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