European stocks extend gains

EUROPE'S main stock markets have extended gains on growing expectations of an interest rate cut by the ECB following poor German economic data.

After sharply rising the day before, London's FTSE 100 index of leading companies closed 0.40 per cent higher to stand at 6431.76 points, while Frankfurt's DAX 30 climbed 1.32 per cent to 7759.21 points and Paris' CAC 40 jumped 1.58 per cent to 3842.94 points.

In foreign exchange trade, the euro dipped to $US1.2995 ($1.27) from $US1.2997 overnight in New York. The US dollar which again neared the 100 yen level in early trading, stabilised back to 99.36 yen compared to 99.48 yesterday.

On the London Bullion Market, gold climbed to $US1428.50 an ounce from $US1408 overnight.

"Following yesterday's weak PMI (private sector economic) data we have had a poor German Ifo survey, further reinforcing market speculation of a rate cut from the ECB," said CMC Markets trader Nick Dale-Lace.

German business confidence took a tumble this month, according to data today, supporting speculation of a possible interest rate cut by the European Central Bank, analysts said.

The Ifo economic institute's closely watched business climate index fell to 104.4 points in April from 106.7 points in March.

That was a bigger drop than expected: analysts had been pencilling in only a very slight decrease this month to 106.2 points.

Gekko Markets trader Anita Paluch said that "bad numbers may be conducive enough for ECB to take some action and provide more liquidity in the light of those economic headwinds".

European stocks markets had closed sharply higher yesterday, with Paris up 3.5 per cent, on growing speculation of a rate cut from the ECB.

Market watchers were today also poring over a batch of mixed company earnings data. Volkswagen shares rose 2.59 per cent to 150.70 euros, even though Europe's biggest carmaker said its net profit skidded sharply lower in the first three months of the current year as a result of the "difficult market environment".

Traders said the share price was higher owing to the company sticking to its full-year target of increasing profit.

In London, Barclays dropped 1.26 per cent to 294.55 pence, erasing earlier gains, as the British bank said it had returned a net profit in the first quarter after suffering a loss after tax one year earlier.

France Telecom meanwhile advanced 2.73 per cent to 8.01 euros after the company said it was banking on high-speed internet services to boost sales after reporting a substantial drop in first quarter earnings owing to stiff competition.

US stocks meanwhile were mixed today, with trade tempered by Apple's fall in profits and a poor read on durable goods orders in March.

In midday trade, the Dow Jones Industrial Average was down 0.17 per cent, the broad-based S&P 500 added 0.03 per cent, while the tech-rich Nasdaq Composite Index lost 0.15 per cent.

Asian stock markets rose on bargain-buying on Wednesday and following a rally overnight on Wall Street according to traders, with Tokyo enjoying a healthy bump as the US dollar tries to break through the 100 yen barrier for the first time in four years.

Investors took their lead from New York, which jumped on Tuesday on the back of upbeat earnings results from some corporate giants, while they seemed to brush off more weak manufacturing figures from China and Europe.

Tokyo closed up 2.32 per cent, Seoul won 0.87 per cent and Sydney climbed 1.72 per cent.

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European stocks extend gains

EUROPE'S main stock markets have extended gains on growing expectations of an interest rate cut by the ECB following poor German economic data.

After sharply rising the day before, London's FTSE 100 index of leading companies closed 0.40 per cent higher to stand at 6431.76 points, while Frankfurt's DAX 30 climbed 1.32 per cent to 7759.21 points and Paris' CAC 40 jumped 1.58 per cent to 3842.94 points.

In foreign exchange trade, the euro dipped to $US1.2995 ($1.27) from $US1.2997 overnight in New York. The US dollar which again neared the 100 yen level in early trading, stabilised back to 99.36 yen compared to 99.48 yesterday.

On the London Bullion Market, gold climbed to $US1428.50 an ounce from $US1408 overnight.

"Following yesterday's weak PMI (private sector economic) data we have had a poor German Ifo survey, further reinforcing market speculation of a rate cut from the ECB," said CMC Markets trader Nick Dale-Lace.

German business confidence took a tumble this month, according to data today, supporting speculation of a possible interest rate cut by the European Central Bank, analysts said.

The Ifo economic institute's closely watched business climate index fell to 104.4 points in April from 106.7 points in March.

That was a bigger drop than expected: analysts had been pencilling in only a very slight decrease this month to 106.2 points.

Gekko Markets trader Anita Paluch said that "bad numbers may be conducive enough for ECB to take some action and provide more liquidity in the light of those economic headwinds".

European stocks markets had closed sharply higher yesterday, with Paris up 3.5 per cent, on growing speculation of a rate cut from the ECB.

Market watchers were today also poring over a batch of mixed company earnings data. Volkswagen shares rose 2.59 per cent to 150.70 euros, even though Europe's biggest carmaker said its net profit skidded sharply lower in the first three months of the current year as a result of the "difficult market environment".

Traders said the share price was higher owing to the company sticking to its full-year target of increasing profit.

In London, Barclays dropped 1.26 per cent to 294.55 pence, erasing earlier gains, as the British bank said it had returned a net profit in the first quarter after suffering a loss after tax one year earlier.

France Telecom meanwhile advanced 2.73 per cent to 8.01 euros after the company said it was banking on high-speed internet services to boost sales after reporting a substantial drop in first quarter earnings owing to stiff competition.

US stocks meanwhile were mixed today, with trade tempered by Apple's fall in profits and a poor read on durable goods orders in March.

In midday trade, the Dow Jones Industrial Average was down 0.17 per cent, the broad-based S&P 500 added 0.03 per cent, while the tech-rich Nasdaq Composite Index lost 0.15 per cent.

Asian stock markets rose on bargain-buying on Wednesday and following a rally overnight on Wall Street according to traders, with Tokyo enjoying a healthy bump as the US dollar tries to break through the 100 yen barrier for the first time in four years.

Investors took their lead from New York, which jumped on Tuesday on the back of upbeat earnings results from some corporate giants, while they seemed to brush off more weak manufacturing figures from China and Europe.

Tokyo closed up 2.32 per cent, Seoul won 0.87 per cent and Sydney climbed 1.72 per cent.

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European stocks nosedive on Cyprus deal

Cyprus has a bail out but the markets are still nervous about the deal.

Employees of Bank of Cyprus gather during a rally outside the headquarters as the bank remained closed. (AP Photo/Thanassis Stavrakis) Source: AP

EUROPEAN stock markets have turned sharply lower after Cyprus agreed to a deal that qualifies the eurozone member for a bailout - but only after a radical downsizing of the island's financial sector.

Bank shares had rallied early after the eurozone struck a deadline-day deal that keeps Cyprus from stumbling out of the single currency at least for now.

But in afternoon trading (local time) shares radically turned direction, brought lower when Eurogroup head Jeroen Dijsselbloem told the Financial Times and Reuters the hard-won agreement to liquidate a major Cypriot lender could become a model for other troubled corners of the eurozone.

"Taking away the risk from the financial sector and taking it on to the public shoulders is not the right approach," Mr Dijsselbloem told the paper hours after the deal was reached.

"If we want to have a healthy, sound financial sector, the only way is to say, 'Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on ... The consequences may be that it's the end of story ..." he said.

The blunt talk of leaving troubled banks to their fate sent shares into reverse with London's FTSE 100 index of leading companies ending the day down 0.22 per cent to 6378.38 points after having traded higher most of the day.

In Frankfurt, the DAX 30 slid 0.51 per cent to 7870.90 points, while in Paris the CAC 40 nosedived 1.12 per cent to 3727.98 points.

Debt crisis flashpoint Madrid also turned to the red, down 2.50 per cent, and Milan slid 2.27 per cent.

"Contrary to what was said last week, Cyprus is no longer a special case which is causing anxiety. We've created a precedent (with the bailout deal)," said Andrea Tueni of Saxo Bank in Paris.

The euro, after also rising early on, dipped to $US1.2854 from $US1.2986 in New York on Saturday.

Gold prices fell to $US1599.25 an ounce from $US1607.75 on Saturday on the London Bullion Market.

German Finance Minister Wolfgang Schaeuble said the bailout deal sealed yesterday between eurozone nations and Cyprus is a fair one that will restore shaken faith in the debt-laden country and stabilise its economy.

"The result is a fair one for everybody involved," Mr Schaeuble said.

It will "help win back lost confidence" and shore up Cyprus's finances, he said.

Cyprus President Nicos Anastasiades battled for 12 hours overnight with his eurozone partners and the IMF to secure the deal.

In the end, however, he let one banking chain go to the wall and left major investors in the island's biggest bank - many of whom are Russian - take a giant hit.

Under the terms of the agreement, the island's second largest lender, Laiki (Popular Bank), will be wound up, an operation Mr Dijsselbloem said would deliver a 4.2-billion-euro ($5.25 billion) saving.

As the impact of the deal sank in and Mr Dijsselbloem comments hit the wires, European banks went deep into negative territory, with BNP Paribas ending the session down 3.04 per cent to 39.93 euros, Credit Agricole down 5.8 per cent to 6.18 euros and Deutsche Bank down 1.61 per cent to 31.88 euros.

US stocks also fell in midday trade, with the Dow Jones Industrial Average 0.73 per cent lower, the broad-based S&P 500 down 0.48 per cent and the tech-rich Nasdaq Composite Index slumping 0.72 per cent.

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European stocks nosedive on Cyprus deal

Cyprus has a bail out but the markets are still nervous about the deal.

Employees of Bank of Cyprus gather during a rally outside the headquarters as the bank remained closed. (AP Photo/Thanassis Stavrakis) Source: AP

EUROPEAN stock markets have turned sharply lower after Cyprus agreed to a deal that qualifies the eurozone member for a bailout - but only after a radical downsizing of the island's financial sector.

Bank shares had rallied early after the eurozone struck a deadline-day deal that keeps Cyprus from stumbling out of the single currency at least for now.

But in afternoon trading (local time) shares radically turned direction, brought lower when Eurogroup head Jeroen Dijsselbloem told the Financial Times and Reuters the hard-won agreement to liquidate a major Cypriot lender could become a model for other troubled corners of the eurozone.

"Taking away the risk from the financial sector and taking it on to the public shoulders is not the right approach," Mr Dijsselbloem told the paper hours after the deal was reached.

"If we want to have a healthy, sound financial sector, the only way is to say, 'Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on ... The consequences may be that it's the end of story ..." he said.

The blunt talk of leaving troubled banks to their fate sent shares into reverse with London's FTSE 100 index of leading companies ending the day down 0.22 per cent to 6378.38 points after having traded higher most of the day.

In Frankfurt, the DAX 30 slid 0.51 per cent to 7870.90 points, while in Paris the CAC 40 nosedived 1.12 per cent to 3727.98 points.

Debt crisis flashpoint Madrid also turned to the red, down 2.50 per cent, and Milan slid 2.27 per cent.

"Contrary to what was said last week, Cyprus is no longer a special case which is causing anxiety. We've created a precedent (with the bailout deal)," said Andrea Tueni of Saxo Bank in Paris.

The euro, after also rising early on, dipped to $US1.2854 from $US1.2986 in New York on Saturday.

Gold prices fell to $US1599.25 an ounce from $US1607.75 on Saturday on the London Bullion Market.

German Finance Minister Wolfgang Schaeuble said the bailout deal sealed yesterday between eurozone nations and Cyprus is a fair one that will restore shaken faith in the debt-laden country and stabilise its economy.

"The result is a fair one for everybody involved," Mr Schaeuble said.

It will "help win back lost confidence" and shore up Cyprus's finances, he said.

Cyprus President Nicos Anastasiades battled for 12 hours overnight with his eurozone partners and the IMF to secure the deal.

In the end, however, he let one banking chain go to the wall and left major investors in the island's biggest bank - many of whom are Russian - take a giant hit.

Under the terms of the agreement, the island's second largest lender, Laiki (Popular Bank), will be wound up, an operation Mr Dijsselbloem said would deliver a 4.2-billion-euro ($5.25 billion) saving.

As the impact of the deal sank in and Mr Dijsselbloem comments hit the wires, European banks went deep into negative territory, with BNP Paribas ending the session down 3.04 per cent to 39.93 euros, Credit Agricole down 5.8 per cent to 6.18 euros and Deutsche Bank down 1.61 per cent to 31.88 euros.

US stocks also fell in midday trade, with the Dow Jones Industrial Average 0.73 per cent lower, the broad-based S&P 500 down 0.48 per cent and the tech-rich Nasdaq Composite Index slumping 0.72 per cent.

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