By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets posted solid
gains on Tuesday, after better-than-expected confidence and housing
data from the U.S. fueled optimism about the economic recovery.
The Stoxx Europe 600 index climbed 1.7% to 309.40, adding to a
0.3% gain from Monday.
Shares of GlaxoSmithKline PLC (GSK) gained 2.4%, after Deutsche
Bank lifted the drug maker to buy from hold, saying upcoming
regulatory decisions are likely to be positive and that the
pipeline looks promising.
Another drug maker, AstraZeneca PLC (AZN) rose 2.9%, after
saying it will buy Omthera Pharmaceuticals Inc. (OMTH) for $12.70
per share, valuing the company at $323 million.
Banks also posted some of the biggest advances, with shares of
HSBC Holdings PLC (HBC) up 2.7% in London, Banco Santander SA (SAN)
4.1% higher in Madrid and BNP Paribas SA rising 3.1% in Paris.
European investors were encouraged by strong data from the U.S.
The S&P/Case-Shiller 20-city composite index showed home prices
grew 10.9% in March compared with the same month last year, marking
the highest annual growth rate since April 2006.
Additionally, the consumer-confidence index climbed to a
five-year high of 76.2 in May, beating expectations of a 72.3
reading.
Data from the U.S. have lately been scrutinized by investors,
after Federal Reserve Chairman Ben Bernanke last week said the
central bank could start tapering its bond-purchase program if data
continue to improve. Equities sold off after the comment, as
worries that a reduction in the $85-billion-dollar-a-month asset
purchases would create financial turmoil offset the outlook for
better macroeconomic data.
Worries that the European Central Bank could be considering
fading out its stimulus strategies were soothed on Monday, after
ECB Executive Board member Joerg Asmussen said the bank's monetary
policy will remain expansive as long as necessary.
U.S. stocks rallied on Wall Street.
In Asia, most indexes closed higher, with Japanese exporters
getting a lift from a weaker yen. The dollar (USDJPY) bought
Yen102.33, up from Yen101.09 late Monday.
In Europe, the U.K.'s FTSE 100 index returned from a long
weekend with a 1.9% gain to 6,783.72.
Oil firms posted solid gains, tracking oil prices higher. BP PLC
(BP) added 1.6% and Royal Dutch Shell PLC (RDSB) gained 2%.
Miners, however, showed weakness after J.P. Morgan Cazenove
slashed the outlook for most metals prices and cut the price
targets of some of the U.K.'s largest mining firms. Shares of
Eurasian Natural Resources Corp. dropped 2.5% and Anglo American
PLC shaved off 0.5%.
France's CAC 40 index added 1.9% to 4,071.75, while Germany's
DAX 30 index gained 1.5% to 8,511.73.
Outside the major indexes, shares of Victrex PLC jumped 9.3%,
after the films and coatings firm increased interim dividends by
15%.
Luxury-watch maker Cie. Financière Richemont SA gained 3.5%,
after data from the Federation of the Swiss Watch Industry said
watch exports rose 5.7% in April.
Novo Nordisk AS (NVO) added 0.8%, after Deutsche Bank lifted the
insulin maker to hold from sell.
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