The European markets rose on Wednesday, as upbeat quarterly earnings from Banco Santander, Siemens and Sanofi-Aventis lifted investor sentiments.
A survey conducted by the European Commission showed that Eurozone economic sentiment rose to 67.2 in April from a revised reading of 64.7 in March, the first significant increase since May 2007. The index stood above the expected reading of 65.6.
The German economy is likely to grow in 2010 on export recovery and stimulus measures, the government said Wednesday while forecasting the worst contraction since the World War II for this year. The Federal Ministry of Economics and Technology said gross domestic product, or GDP, will fall 6% this year, before rising 0.5% in 2010. The forecast for 2009 was lowered from an earlier prediction of a 2.25% contraction.
The U.S. Commerce Department said in its report that the country's GDP decreased at an annual rate of 6.1% in the first quarter compared to a 6.3% drop in the fourth quarter. Economists had been expecting a more modest decline of about 4.7%.
Crude for June delivery rose $0.79 to $50.71 a barrel on the New York Mercantile Exchange, by the time the European markets closed, even though government data showed that the U.S. is consuming less than it has in years and the country's inventories are bloated with the most surplus crude in nearly 19 years.
The FTSEurofirst 300 index of pan-European blue chips closed 1.89% higher at 816.40 points, while the narrower DJ Stoxx 50 index rose 1.57% to 1,997.50 points.
Around Europe, the U.K.' FTSE 100 index climbed 2.27% to 4,189.59, while France's CAC 40 index surged up 2.16% to 3,116.94 and Germany's DAX index climbed 2.11% to 4,704.56.
Banco Santander, Spain's largest bank, climbed 6.1% after the company reported first quarter profit that beat analysts' estimate.
Siemens, Germany's biggest engineering company, surged up 8.2% after the company reported higher-than-expected quarterly profit.
Sanofi-Aventis, France's biggest drugmaker, rose 4.3% after the drugmaker's first quarter earnings beat analysts' expectations.
Nordea, the Nordic region's biggest bank, gained 9.6% after the company reported a smaller-than-expected declined in first quarter profits.
Barclays, Britain's third largest bank, jumped 10.4% and Lloyds Banking Group, Britain's biggest mortgage lender, climbed 8.3% after HSBC upgraded the stocks to overweight from neutral.
Heavily weighted oil stocks rallied after crude oil prices advanced. BP, Europe's biggest oil company, climbed 1.2%, while Royal/Dutch Shell, the second biggest, surged up 1.7% and Total, the third biggest, rose 0.9%.
Similarly, mining stocks gained after metals prices rose. BHP Billiton, the world's biggest miner, rose 1.7%, while Anglo American, the second biggest, climbed 7.5% and Rio Tinto, the third biggest, surged up 6.5%. Copper miner Antofagasta gained 3.4%.
On the other hand, ArcelorMittal, the world's biggest steelmaker, fell 3.7% after the company unveiled a share issue plan. The company also posted a net loss of $1.06 billion for the first quarter.
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