European shares rose on Tuesday, with miners gaining after aluminium producer Alcoa
Alcoa reported a loss, but its revenue beat expectations and the company was upbeat in its global demand outlook for the metal, especially in the aerospace and automotive markets.
It was about the top line growth with Alcoa, said Heino Ruland, strategist at Ruland Research, in Frankfurt.
The STOXX Europe 600 Basic Resources Index <.SXPP> rose 2.9 percent, as copper prices rose, with the demand outlook for the metal further brightened by strong import data from top metals consumer China.
The heavyweight banking sector was also among the gainers, with the STOXX Europe 600 euro zone banking Index <.SX7E> up 4.1 percent. Italy's UniCredit
Fitch (saying it won't) downgrade France has been pushing the financials higher, Ruland said.
Fitch Ratings does not expect to cut France's triple-A credit rating this year, while countries under review such as Italy or Spain could be downgraded by one or two notches, the agency's EMEA ratings head said Tuesday.
At 11:54 a.m., the pan-European FTSEurofirst 300 <.FTEU3> index of top shares was up 1.5 percent at 1,023.99 points and was set to test its 200-day moving average of about 1,025.3. A break through this level would be a positive sign for equities.
Strategists said some stronger economic indicators, including U.S. labour data, had helped boost investor optimism but the euro zone crisis might cap any gains in the short term.
The outlook for markets is steadily improving. The global data is looking remarkably better. In Europe, the best way to play the equity market in general is to buy everything with external exposure and underweight everything with domestic demand exposure, Daniel McCormack, strategist at Macquarie, said.
Traders also pointed to key Italian and Spanish debt auctions later in the week which will test investor appetite for risk for the two countries seen most exposed to the euro zone debt crisis.
European company-related news was mixed. Philips Electronics
Germany's Software AG
The STOXX Europe 600 Technology Index <.SX8P> fell 0.4 percent, as most other sectors advanced.
(Additional reporting by Joanne Frearson; Editing by Jon Loades-Carter)