European stock markets gained in early trade Wednesday ahead of second 3-year long-term refinancing operation (LTRO) by the European Central Bank.
DAX30 advanced 42.03 points or 0.61 percent to 6,929.66 and CAC 40 gained 11.29 points or 0.33 percent to 3,465.28, while the FTSE 100 fell 7.45 points or 0.13 percent to 5,920.46.
The ECB's second 3-year LTRO is due to be released around 10:30GMT. Analysts at Credit Agricole expects a fairly large take-up of around EUR600 to 700 billion and thus a positive market reaction, at least in the immediate aftermath of the auction.
It all depends on the size of the take up. I think the market will be happy with 500 billion euros, the banks have been responding quite well to improving credit conditions and share prices have been highly correlated to it, said Colin McLean, managing director at SVM Asset Management in Edinburgh, Reuters reported.
Meanwhile, Italy managed to auction 10-year debt at a cheaper rate than previously. Portugal passed a third review of its bailout program and said it would not need a second rescue like Greece despite a deeper than forecast recession.
Among the banking stocks, Credit Agricole SA gained 2.93 percent; BNP Paribas SA advanced 1.71 percent, while German Commerzbank AG rose 1.83 percent.
RWE AG surged 3.02 percent to EUR 32.195 after if was up graded to “outperform” rating from “neutral” rating at BNP Paribas.
Crude oil prices recovered after sharp losses on Tuesday. Light sweet crude for April delivery gained $0.57 to $107.12 a barrel in electronic trading on the New York Mercantile Exchange during European trading hours. Brent crude oil futures for April delivery rose 0.95 percent to $122.72 a barrel on the ICE futures exchange in London.