MW: European shares surge on first day of December
Vivendi shares up after reportedly agreeing NBC deal with GE
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares rose on the first day of December, as worries about the potential fallout to the global economy from Dubai's debt woes abated and deal speculation also lent a hand.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 244.22, +5.05, +2.11%) rose 1.4% to 242.49.
After taking into account Monday's 1.4% drop, the Stoxx 600 index ended November with a 1% gain and a 21.5% year-to-date gain. Read more on December trading in Europe.
Investors have been jittery since conglomerate Dubai World last week requested a six-month suspension of its debt payments but late Monday there were reports that the firm is talks with banks to restructure some of that debt.
European banks are seen as have having more exposure to the Middle East than Asian or U.S. lenders and the sector advanced on Tuesday. HSBC Holdings (UK:HSBA 729.30, +21.20, +3.00%) (HBC 59.01, +0.55, +0.94%) shares were up 2.4% and Royal Bank of Scotland (UK:RBS 34.30, +1.14, +3.44%) shares rose 3.7%.
There were other factors at work in the financial sector as well, with BNP Paribas (FR:BNP 56.28, +1.28, +2.33%) shares up 1.9% in Paris after it increased the target for the synergies it expects to draw out of its purchase of Fortis.
KBC (BE:KBC 31.45, +1.81, +6.11%) shares rose 4.4% in Brussels after Morgan Stanley initiated coverage on the lender with an overweight rating and added it to its best ideas portfolio.
"We are confident the company can execute on its restructuring plan to repay government capital and transition back to the solid high-quality bank-insurance franchise it was before the financial crisis," the broker said.
On a regional level, the U.K. FTSE 100 index (UK:UKX 5,287, +96.20, +1.85%) rose 1.4% to 5,264.86, the German DAX index (DX:DAX 5,743, +116.90, +2.08%) climbed 1.5% to 5,708.90 and the French CAC-40 index (FR:PX1 3,759, +78.42, +2.13%) jumped 1.5% to 3,735.27.
Asia stocks were higher and U.S. stock futures were pointing to early gains on Wall Street, with Dow Jones Industrial Average futures up 53 points.
Oil and metal futures were also higher in electronic trading, with gold up $6.30 at $1,188.60 an ounce. Miners jumped, with BHP Billiton (UK:BLT 1,907, +49.00, +2.64%) (BHP 75.30, +0.61, +0.82%) shares up 2.8% and Anglo American (UK:AAL 2,691, +89.00, +3.42%) shares up 3%.
Construction and auto stocks, which are also sensitive to demand trends, were strong on Tuesday, with German car BMW (DE:BMW 32.32, +0.80, +2.54%) shares up 2.4% and Saint Gobain (FR:SGO 37.45, +1.23, +3.38%) shares up 2.8%.
Deal speculation also helped selected firms advance. Shares of French media conglomerate Vivendi (FR:VIV 19.77, +0.58, +3.02%) rose 2.7%.
General Electric Co. (GE 16.02, +0.08, +0.50%) has reached a tentative agreement to buy partner Vivendi's stake in NBC Universal for $5.8 billion, according to reports Monday. See full story.
Alstom (FR:ALO 49.69, +3.06, +6.55%) shares rose 4.8% and Schneider Electric (FR:SU 76.24, +3.35, +4.60%) shares were up 3.7% after the firms said that have submitted a bid to buy the transmission and distribution assets of Areva (FR:CEI 347.00, +1.40, +0.41%) for an equity value of $2.29 billion.
