European Markets Rise On Positive EU Summit Developments

By Bhaskar Prasad | June 29 2012 4:01 AM

European markets rose Friday following encouraging announcements at the European Union summit in Brussels, where EU leaders gathered to tackle the debt crisis threatening the financial union.

REUTERS

Styrofoam bull figurines are pictured in front of the German DAX Index board during the first trading day at Frankfurt's stock exchange in Frankfurt Jan. 2, 2012.

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The German DAX 30 index rose 2.48 percent or 152.36 points to 6302.27. Shares of Deutsche Bank AG rose 3.29 percent and shares of Daimler AG advanced 2.97 percent.

The French CAC 40 index was up 2.76 percent or 84.13 points to 3135.81. Shares of Societe Generale SA rose 5.88 percent and shares of BNP Paribas SA advanced 5.73 percent.

London's FTSE 100 index rose 1.47 percent or 80.58 points to 5573.64. Shares of Aviva PLC PLC rose 3.36 percent and shares of Aviva PLC climbed 2.90 percent.

Spain's IBEX 35 advanced 3.88 percent or 261 points to 6982.70. Shares of Bankia SA rose 7.78 percent, and those of Banco Santander SA climbed 6.14 percent.

Investors are focusing on the European Union summit that will conclude Friday in Brussels. Market players expect EU leaders to submit a road map for the banking and fiscal union for the next 10 years at the summit.

On Thursday, summit leaders agreed to release a 120 billion euro ($149 billion) package intended to enhance euro zone economic growth. In an important step on Friday, the summit also agreed to recapitalize euro zone banks without adding to government debt, which will help lower the borrowing Spain and Italy's borrowing costs.

Investors are watching whether the summit will be able to overcome the differences between Germany and France. Germany wants financial solidarity as a precondition for closer political integration. But France does not want financial solidarity if it is not preceded by political integration.

Investors are looking for the EU to have a long-term vision and a clear road map toward increased political, economic, banking and fiscal integration.