The European markets rose for the fourth day on Tuesday, as banking stocks rallied after UBS after reported a narrower first quarter loss and Standard Chartered posted record quarterly profits.
In economic news, the Institute for Supply Management in the U.S. said its index of activity in the service sector rose to 43.7 in April from 40.8 in March, with a reading below 50 indicating a contraction in the sector. Economists had been expecting a more modest increase to a reading of 42.2.
Meanwhile, Eurozone producer prices in March recorded the biggest annual fall in 22 years, adding more pressure on the central bank to cut its key rate this week. According to a report released by European Union statistics agency Eurostat, industrial producer prices slipped 3.1% annually in March, larger than the revised 1.7% decrease in the prior month. The annual decline in March was larger than the expected 2.9% decrease and the biggest since February 1987.
Crude for June delivery fell $0.66 to $53.81 a barrel on the New York Mercantile exchange, by the time the European markets closed, as bulging oil inventories and falling energy demand outweighed fragile hopes for an economic recovery.
The FTSEurofirst 300 index of pan-European blue chips closed 0.49% higher at 846.81 points, while the narrower DJ Stoxx 50 index rose 0.56% to 2,066.02 points.
Around Europe, the U.K.'s FTSE 100 index climbed 2.21% to 4,336.94, while France's CAC 40 index fell 0.40% to 3,225.00 and Germany's DAX index slipped 1.01% to 4,853.03.
UBS, Switzerland's largest bank, rose 2.3% after the company reported a narrower loss for the first quarter.
Asia-focused bank Standard Chartered climbed 8.5% after the company said it made a strong start to the year with record earnings and revenue in the first quarter.
Other banks also gained. HSBC, Europe's largest bank, rallied 7.4%, while Royal Bank of Scotland, Britain's second largest bank, climbed 9.1% and Barclays, the third largest, surged up 6.8%. Lloyds Banking Group, Britain's biggest mortgage lender, gained 10.5%.
Mining stocks edged higher after a report yesterday showed Chinese manufacturing expanded for the first time in nine months. BHP Billiton, the world's biggest miner, rose 1.7%, while Anglo American, the second biggest, surged up 3.5% and Rio Tinto, the third biggest, climbed 2.8%.
ASM International, Europe's second biggest semiconductor equipment maker, jumped 18% after Intel Corp. said it holds a 4% stake in the company.
Irish drugmaker Elan Corp., which considering selling a stake in itself, climbed 8.5% on renewed market speculation that Danish rival H. Lundbeck A/S will make a bid.
On the other hand, Adidas, the world's second biggest sporting-goods maker, slipped 11.2% after the company reported a 97% drop in first quarter profits, as demand slumped and the company incurred costs to restructure its Reebok division.
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