EUROPE MARKETS: Europe Stocks Rally After German ZEW Report
02/19/2013| 10:26am US/Eastern
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets posted broad-based gains on Tuesday, boosted by stronger-than-expected German economic-sentiment data, with shares of Danone SA among major advancers after a job-cut announcement.
The Stoxx Europe 600 index rallied 1% to 289.75, on track to break a three-day losing streak.
Shares of Danone jumped 5.3% after the yogurt maker announced plans to slash around 900 jobs in Europe in response to the region's downturn.
Standard Chartered PLC picked up 2.1%, as Morgan Stanley lifted the bank to overweight from equal weight.
Elsewhere, investors looked to Germany where the ZEW Indicator of Economic Sentiment jumped 16.7 points to 48.2 in February, exceeding analysts' expectations of a 35.0 print.
The upbeat data followed an encouraging January reading, where the index jumped to the highest level since May 2010, fueling hopes that Europe's largest economy is making its way out of the crisis.
February's current economic-conditions indicator, however, dropped slightly to 5.2.
"The fact that the index is now firmly in positive territory means that a large majority of investors see economic conditions improving in the next six months," Jennifer McKeown, senior European economist, said in a note.
"But there are a few caveats. First, the index has never been well correlated with GDP growth and we will await February's business surveys for stronger evidence of a recovery," she added.
Investors further shook off U.S. housing data showing a gauge of confidence among home builders declined in February, the first weakening since April. The index ticked down to 46 in February from 47 in January, below expectations of a 48 result.
U.S. stocks opened higher on Wall Street on the first trading day of the week. U.S. markets were Monday closed for the Presidents Day holiday.
Back in Europe, Germany's DAX 30 index added 1.5% to 7,739.62, with shares of health-care major Bayer AG up 3.1%. The company said it has initiated trials on the blindness treatment VEGF Trap-Eye with Regeneron Pharmaceuticals Inc. (>> Regeneron Pharmaceuticals Inc).
In France, the CAC 40 index put on 1.7% to 3,729.03. Shares of Carrefour SA gained 3.4% after J.P. Morgan Cazenove initiated coverage of the supermarket retailer with an overweight rating.
Shares of Sanofi SA (>> Sanofi SA) put on 2%, as the drug maker said the U.S. Food and Drug Administration has accepted to review an application for the diabetes drug lixisenatide.
The FTSE 100 index gained 0.8% to 6,365.47, with shares of Barclays PLC (>> Barclays PLC) 1.2% higher.
Shares of Vodafone (>> Vodafone Group plc) declined after a broker downgrade, off 2.3%. Bernstein cut the wireless-telecom firm to underperform from market perform.
Outside the main index in London, shares of Drax Group PLC rallied 5.9% as the electric-utility firm's 2012 results beat expectations.
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