Banks get a broker boost; Portugal’s PSI 20 up over 1%
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — European stocks rose on Tuesday, led by banks as tensions in the region eased after Japan said it plans to buy debt issued by the European Financial Stability Facility.
The Stoxx Europe 600 index (ST:STOXX600 280.56, +2.08, +0.75%) gained 0.7% to 280.30 in morning trading, after losing 0.9% in the prior session.
Markets were boosted after Japanese Finance Minister Yoshihiko Noda said the country may buy more than 20% of the amount of EFSF bonds that will be initially issued later this month. The EFSF was established by the European Union to provide emergency loans for needy euro-area countries in the wake of last year’s bailout of Greece.
The European Central Bank late Monday reportedly bought Portuguese debt, further underpinning sentiment. Stocks in Portugal slumped yesterday on worries that the nation was being pressured to request financial aid. The country faces a government bond auction on Wednesday.
Lisbon’s PSI 20 index (XX:PSI20 7,373, +87.55, +1.20%) advanced 1.2% to 7,369.68, led by a 2.1% gain for Banco Comercial Portugues SA (PT:BCP 0.53, +0.01, +1.34%) and a 2% rise for Portugal Telecom SGPS SA (PT 10.70, +0.28, +2.69%) (PT:PTC 8.28, +0.08, +0.99%) .
Banks led gains across Europe as well, getting additional help from a couple of broker upgrades. Societe Generale on Tuesday upgraded the European banking sector to overweight, saying it believes the sector can achieve more profitability than the market expects.
Societe Generale upgraded Credit Agricole (FR:ACA 9.55, +0.15, +1.60%) to buy from hold, noting its other top picks included Barclays PLC (BCS 17.35, +0.09, +0.52%) [ (UK:BARC 288.45, +11.75, +4.25%) and Lloyds Banking Group PLC (UK:LLOY 66.67, +1.48, +2.27%) (UK:LLOY 66.67, +1.48, +2.27%) (UK:LLOY 66.67, +1.48, +2.27%) (UK:LLOY 66.67, +1.48, +2.27%) .
In Paris, shares of Credit Agricole rose 1.9%, helping the CAC 40 index (FR:PX1 3,825, +23.14, +0.61%) gain 0.4% to 3,818.38.
In London, Barclays rallied 3.7% and Lloyds Banking Group rose 2%. Shares of HSBC Holdings PLC (HBC 52.46, -0.44, -0.83%) (UK:HSBA 689.30, +16.90, +2.51%) jumped 2.6% after Citigroup upgraded the investment bank to hold from buy, citing strong new management and expectations for stronger growth from Asian operations.
The FTSE 100 index (UK:UKX 6,017, +60.82, +1.02%) rose 0.9% to 6,008.64, lifted by those bank heavyweights.
On the downside in London, shares of Marks & Spencer Group PLC (UK:MKS 382.30, -1.70, -0.44%) fell 1.6% after the retailer said it expects trading conditions to remain challenging, as it reported fiscal third-quarter sales.
Shares of Siemens AG (DE:SIE 91.20, +1.80, +2.01%) led the gains in Germany with a 2.5% rise after the electronics and engineering group’s chief financial officer, Joe Kaeser, said the company will report higher fiscal first-quarter earnings and sales. He was speaking at an investor conference in New York on Monday night, according to media reports.
The German DAX 30 index (DX:DAX 6,890, +32.95, +0.48%) gained 0.5% to 6,887.66.
