By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks opened higher Wednesday,
with auto shares including Volkswagen AG revving up, helping the
regional market drive toward gains after two losing sessions.
The Stoxx Europe 600 was up 0.5% at 335.47. The index on Tuesday
gave up 0.3% as investors focused on concerns about valuations
throughout global markets, and as tensions between Ukraine and
Russia appeared to escalate. After the close of European trade
Wednesday, investors will assess minutes from the Federal Reserve's
policy meeting in March, looking for any clues about what may be
the central bank's next move.
The pan-European index was pulled higher Wednesday in part by
bank stocks, including a 1% rise for sector heavyweight HSBC PLC
and a 2.9% bounce for Standard Chartered PLC
Shares of Volkswagen AG and Ryanair Holdings also appeared among
the session's strongest advancers, following ratings upgrades for
the auto maker and the air carrier. Ryanair shares were lifted 2.8%
after an upgrade to overweight from equal weight at Barclays, which
said it expects the company "will positively surprise on pricing,
load factor and ancillaries this summer; we also expect a
bounce-back in fares next winter."
Volkswagen AG rose 2.9% as Bernstein moved its rating up to
outperform from market-perform. But BMW AG was downgraded by
Bernstein to market-perform from outperform. "Having been BMW bulls
for a number of years," and "notoriously cautious" on Volkswagen,
Bernstein said it's time it changed recommendations in part as
expectations for VW have moderated.
BMW's stock isn't expensive, said Bernstein. "However, much as
we admire BMW, we believe in future years it may find growth harder
to deliver as its products saturate every niche in the premium
segment, as competition intensifies and as FX pressures build once
hedges expire."
But on Wednesday, BMW reported it had its strongest-ever month
in March as sales in China surged and European car markets recover.
BMW shares turned higher by 0.3%.
Preferred shares of Porsche Automobil Holding climbed 4.7% after
Bernstein raised its rating to outperform from market-perform,
saying the upgrade was in line with its higher price target of 100
euros ($137.88) on Porsche, up from EUR75.
Shares of Renault SA and Daimler AG notched gains as well,
rising 2.1% and 0.8%, respectively, while Fiat SpA was pushed up by
1.5%.
Volkswagen was the best-performing stock on the German DAX 30 ,
guiding a 0.2% rise to 9,513.35 for the index.
Data out on Wednesday showed German exports fell 1.3%
month-on-month in February, a reading weaker than expected. Imports
were up 0.4%, on a seasonally adjusted basis, Germany's statistics
office said.
France's CAC 40 rose 0.4% to 4,441.32. Investors will watch for
developments related to a pledge by France's new prime minister,
Manuel Valls, to cut corporate and household taxes by more than
EUR11 billion over the next three years.
Meanwhile, in the U.K., the trade deficit narrowed to GBP2.1
billion ($3.5 billion) in February as both exports and imports
dropped, the Office for National Statistics reported.
The FTSE 100 picked up 0.7% to 6,638.71, with shares of
Kingfisher PLC and IMI PLC higher after ratings upgrades for the
home-improvement retailer and the engineering company.
Elsewhere in Europe, a long-term bond sale set for as soon as
Wednesday will usher Greece back into the international capital
markets for the first time since its exile in 2010.
More news from MarketWatch:
Audi, FAW to launch plug-in hybrid sedan in China
Asia Markets live blog: Yen rise pressures Japanese stocks
Subscribe to WSJ: http://online.wsj.com?mod=djnwires