The European markets rose for the first time in four days on Wednesday, as automotive stocks rallied on news of the approval of plans to raise the funds available for subsidies to German car buyers and the launch of auto supplier support programs by U.S. automakers General Motors and Chrysler.
German Chancellor Angela Merkel's cabinet today approved plans to raise the funds available for subsidies to buyers of new low-emission vehicles who scrap their old cars to ?5 billion euros this year.
The U.S. Treasury Department said Wednesday that GM and Chrysler have launched auto supplier support programs backed by up to $5 billion in U.S. government funds. The programs will guarantee receivables owed to the auto parts suppliers for any good shipped after March 19.
In economic news, the U.S. Commerce Department said in its report that wholesale inventories fell 1.5% in February following a revised decrease of 0.9% in January. Economists had expected inventories to fall by 0.6% compared to the 0.7% decrease originally reported for the previous month.
Crude for May delivery rose $2.15 to $51.30 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as new U.S. government data showed bulging crude inventories rising less than what analysts were expecting.
The FTSEurofirst 300 index of pan-European blue chips closed 0.25% higher at 762.58 points, while the narrower DJ Stoxx 50 index rose 0.23% to 1,876.70 points.
Around Europe, France's CAC 40 index rose 0.65% to 2,921.06 and Germany's DAX index surged up 0.82% to 4,357.92, while the U.K.'s FTSE 100 index fell 0.13% to 3,925.52.
BMW, the world's biggest maker of luxury cars, surged up 6.2%, while Daimler, the second biggest, climbed 7.87% and sports car maker Porsche rose 4.2%. Peugeot, Europe's second biggest carmaker, gained 6.4% and Renault, France's second biggest carmaker, added 5.6%.
Mining stocks edged higher after gold, silver and aluminum prices advanced. Anglo American, the world's second biggest miner, rose 0.9%, while Rio Tinto, the second biggest, climbed 3.8% and Kazakhmys, Kazakhstan's biggest copper producer, edged up 1.2%.
On the other hand, Pernod Ricard, the world's second largest liquor maker, dropped 7.1% after the company announced a ?1 billion rights offer and sold its Wild Turkey bourbon brand for $575 million to speed up debt reduction.
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