By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets advanced on
Tuesday, climbing back from their biggest three-day fall since June
last year, as miners rose after a broker upgrade and banks
recovered from recent sharp losses.
The Stoxx Europe 600 index added 0.7% to 324.26. On Monday, the
benchmark closed at the lowest level since Dec. 20 on renewed
uncertainty about emerging markets, after a slowdown in the Chinese
manufacturing sector spooked investors out of risky assets such as
equities.
Among major movers on Tuesday, Software AG rallied 7.4% after
the German company said it reached a record level of license sales
in the fourth quarter.
Mining firms were on the rise after Nomura lifted its rating on
the European metals-and-mining sector to neutral from bearish. The
analysts said BHP Billiton PLC (BHP) , up 1.4%, is now their top
pick, followed by Rio Tinto PLC (RIO), 2.5% higher.
Banks were also mostly higher after suffering some of the worst
declines in the recent days' market selloff. Shares of Banco
Espirito Santo SA gained 2.7% in Lisbon, CaixaBank SA added 4.2% in
Madrid, and Lloyds Banking Group PLC (LYG) picked up 2.9% in
London.
In macroeconomic news, data from the U.K. Office for National
Statistics showed the country's economy expanded at the strongest
pace since 2007 last year with gross domestic product rising 1.9%.
In the fourth quarter, however, growth slowed down to 0.7% from
0.8% in the previous quarter, which was broadly in line with
analyst expectations.
"There seems every reason to believe that robust growth will be
sustained into 2014, not least because of the promise of ongoing
ultra-loose monetary-policy stance from the Bank of England and
additional stimulus such as the Funding for Lending and Help to Buy
schemes," Chris Williamson, chief economist at Markit, in a
note.
The U.K.'s FTSE 100 index traded 0.4% higher at 6,573.84 after
the data. The pound (GBPUSD), however, moved lower as the slower
growth rate in the fourth quarter eased pressure on the Bank of
England to raise interest rates this year. The currency traded at
$1.6550, down from a high of $1.6626 earlier in the day and lower
than the $1.6580 recorded late Monday.
France's CAC 40 index picked up 0.8% to 4,177.31, while
Germany's DAX 30 index added 0.7% to 9,415.14.
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