European Markets Rise As Euro Zone Concerns Persist

By Bhaskar Prasad | June 19 2012 5:11 AM

European markets rose Tuesday, but investors remained cautious as concerns about the euro zone debt crisis were revived with increasing borrowing costs of Spain.

REUTERS

The German DAX Index board is pictured behind a plastic flower during a trading session at the first trading day at Frankfurt's stock exchange in Frankfurt January 2, 2012.

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The German DAX 30 index rose 0.44 percent or 27.48 points to 6,275.68. Shares of Bayer AG rose 0.86 percent while shares of Deutsche Bank AG declined 1.15 percent.

London's FTSE 100 index rose 0.70 percent or 38.19 points to 5,529.28. Shares of BP PLC advanced 1 percent and shares of BG Group PLC climbed 1.79 percent.

The French CAC 40 index marginally rose 0.07 percent or 2.23 points to 3,068.42. Shares of Schneider Electric SA rose 1.62 percent and shares of Technip SA advanced 1.93 percent.

Spain's IBEX 35 rose 1.44 percent or 93.60 points to 6613.50. Shares of Telefonica SA climbed 2.93 percent while shares of Bankia SA fell 4.66 percent.

Athens Stock Exchange in Greece rose 2.16 percent or 12.54 points to 593.21. Shares of the National Bank of Greece SA climbed 5.33 percent and shares of Terna Energy SA advanced 6.54 percent.

The optimism seen Monday following the Greek election, in which pro-bailout parties won the majority, faded quickly. Investors are worried that the formation of the pro-austerity measures government alone will not be sufficient to restore economic and financial stability to Greece.

Adding to the concern of the market players was the rising borrowing cost of Spain as its 10-year government bond yields soared to over 7 percent. Investors are also worried that the contagion will spread to Italy, which is faced with mounting debt pressures.