Forex Pros – European stock markets advanced on Thursday, led higher by financials after Portugal announced it would seek a bailout and ahead of an expected euro zone interest rate hike, while U.S. futures indexes pointed to a higher open on Wall Street.
During European morning trade, the EURO STOXX 50 climbed 0.25%, France’s CAC 40 gained 0.2%, while Germany’s DAX 30 edged 0.1% higher.
Portugal became the third euro zone member to seek a bailout from the European Union on Wednesday, with the size of the package expected to be as much as EUR80 billion.
Portuguese banks Banco Espirito Santo and Banco Comercial Portugues rallied 5.3% and 4.9% respectively in wake of the aid request.
Across the sector, Europe’s largest banking group BNP Paribas saw shares climb 2.25%, Deutsche Bank rose 2%, while Banco Santander added 2.2% as markets awaited an interest rate announcement by the European Central Bank later in the day.
The ECB was widely expected to raise its key lending rate to 1.25% from a record low of 1.0%.
Meanwhile, shares in German automaker BMW slumped 1.8% after Morgan Stanley recommended selling the share, citing a slowdown in earnings growth. Shares in rival Audi dropped 1.1%, while Porsche slipped 1.35%.
Also Thursday, shares in German construction group Hochtief tumbled 6.5% after it said that it expected “significant adverse effects” on its 2011 earnings outlook resulting from losses in its Australian subsidiary Leighton Holdings.
In London, the FTSE 100 eased up 0.1% ahead of the Bank of England’s interest rate announcement. Banks were among the top gainers, with Royal Bank of Scotland jumping 2.6%, Barclays rising 1.5% and HSBC Holdings up 1.6%.
Shares of soft-drinks manufacturer Britvic dropped 4.2% after Goldman Sachs downgraded the stock to ‘sell’, citing a slowdown in revenue resulting from a “challenging sales environment” in the U.K. and Ireland.
The outlook for U.S. equity markets, meanwhile, was upbeat. The Dow Jones Industrial Average futures pointed to a modest gain of 0.05%, S&P 500 futures indicated a rise of 0.1%, while the Nasdaq 100 futures edged 0.03% higher.
Later in the day, the U.S. was to publish a weekly report on initial jobless claims as well as data on consumer credit.
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