German stocks rebounded on Wednesday from four days of losses, helped by the nation’s top court rejection of lawsuits against German participation in European rescue funds.
German chipmaker Infineon Technologies and BMW, the carmaker, led gains, moving up 8.6 per cent to €5.59 and 6 per cent to €53.71, respectively. Eon was up 3.6 per cent to €13.94 and RWE rose 2.9 per cent to €24.43 on a report that the power generating companies may sell their stakes in UK nuclear power company Urenco Group. The shares were also lifted by a Goldman Sachs report recommending European utilities.
The Xetra Dax Index advanced 4.1 per cent to 5,405.53 after slumping 10 per cent over the previous four days.
On Tuesday, the Dax fell to its lowest level since August 2009. This came as reports in the US, Europe and China pointed towards a slowdown in global growth, which would curb demand for Germany’s exports. The benchmark has retreated 29 per cent from this year’s high on May 2.
“The market is perhaps due for a relief rally after some sharp declines,” said Colin Tan at Deutsche Bank.
Italian stocks opened sharply higher on Wednesday, with carmaker Fiat leading gains, up 8.6 per cent to €3.99. The FTSE MIB rose 4.2 per cent to 14,645.96, after Italy’s government promised on Tuesday to raise value-added tax, bowing to market pressure for more action on its swollen debt.
Greek banks rallied after the German court rejected challenges to the participation of Europe’s largest economy in European rescue funds. They were led by the National Bank of Greece, which rose 22.7 per cent to €3.41. EFG Eurobank climbed 14.7 per cent to €1.33 and Piraeus Bank jumped 14.8 per cent to €0.62.
European carmakers also headed higher, responding to a more positive mood across European markets. Renault gained 7.4 per cent to €25.78 and Porsche gained 6 per cent to €44.41.
Wartsila rose 7.8 per cent to €18.77 as the Finnish engineering group said it had won a power plant order worth €155m from gold miner Barrick Gold Corporation’s subsidiary in the Dominican Republic.
The FTSE Eurofirst 300 index rose 3.1 per cent to 931.54, and the CAC 40 index rose 3.6 per cent to 3073.18.
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