The pan-European Dow Jones Stoxx 600 index (ST:SXXP 225.69, +1.46, +0.65%) rose 0.7% to 225.70, after closing with a 2% loss on Monday as investors worried that recent tentative signs that the global economy is improving won't translate into strong gains.
Banks and miners took the brunt of the selling on Monday but were higher on Tuesday, with the banking sector up 0.9% and the mining sector up 1.5%.
HSBC Holdings shares (UK:HSBA 656.70, +19.00, +2.98%) (HBC 52.47, -1.65, -3.05%) climbed 2.8%. The lender was upgraded by Goldman Sachs to buy from neutral, with the broker saying it now believes the bank's HSBC Finance Corp. unit will cease to be a major drag on group earnings from 2010.
Goldman said the division's core credit-card portfolio shrank rapidly in the first half of 2009, while the broker had been expecting modest growth. Goldman still expects net charge-off rates to rise from here, reflecting rising unemployment. However, the broker said it now expects cumulative net losses in the division from 2009 through 2012 to be $9.4 billion, down from its previous forecast of $17.6 billion
On a regional level, the U.K. FTSE 100 index (UK:UKX 4,680, +35.14, +0.76%) rose 0.6% to 4,672.26, the German DAX index (DX:DAX 5,227, +25.16, +0.48%) climbed 0.4% to 5,223.01 while the French CAC-40 index (FR:PX1 3,438, +18.56, +0.54%) rose 0.7% to 3,444.75.
Asian stock markets were mixed on Tuesday with the closely-watched Shanghai Composite Index moving in and out of the red a day after posting its biggest single-day percentage drop since November. See full story.
U. S. shares also fell heavily on Monday, as investors joined in a global sell-off.
Of miners, Rio Tinto (UK:RIO 2,314, +68.50, +3.05%) (RTP 148.40, -9.89, -6.25%) shares rose 2.6% after Australia's Amcor (AU:AMC 5.65, +0.22, +4.05%) said it will pay $2.03 billion for the majority of Rio Tinto's Alcan Packaging business, marking its biggest-ever acquisition.
Amcor will acquire Alcan Packaging businesses including global pharmaceuticals, tobacco and European and Asian food divisions. The assets being acquired encompass operations in 28 countries and about 14,000 employees. See full story.
Companies updating investors on Tuesday included real-estate developer British Land (UK:BLND 492.00, -4.90, -0.99%) , up 0.5% after it said that its first-quarter net loss narrowed to 273 million pounds ($447 million), from 565 million pounds last year.
British Land said that its portfolio fell in value by 3.7% in the quarter to 8.2 billion pounds, with net-asset-value per share down 9% at 361 pence. However, the pace of portfolio-valuation decline slowed markedly, the firm said, and evidence of yield strengthening has continued into the second quarter.
