Europe stocks firmer after German ZEW survey Spain auction shows solid demand, lower yields

By Barbara Kollmeyer, MarketWatch







MADRID (MarketWatch) — European stock markets recovered some ground in
choppy markets on Tuesday, supported by resource stocks and improvement
in an indicator of German economic sentiment. Banks remained under
pressure on jitters over the sovereign-debt crisis.







The Stoxx Europe 600 index


/quotes/zigman/2380150 XX:SXXP
+0.61%



rose 0.6% to 237.48. The index dropped 1.9% in the prior session amid
fresh doubts over whether last week’s European Union summit had gone far
enough to combat the sovereign-debt crisis.









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Among the bigger regional gainers in Europe, the German DAX 30 index


/quotes/zigman/2380246 DX:DAX
+0.67%



rose nearly 1% to 5,842.22.







Fresh data showed the ZEW economic-sentiment indicator for Germany
improved 1.4 points in December to minus 53.8, halting a nine-month
slide.







“Apparently, the financial-market experts expect the economic activity
to slow down, but not to plunge during the next six months,” said ZEW
President Wolfgang Franz in a statement.







Economists at Capital Economics cautioned about getting too excited over
the survey as the rise still doesn’t reverse last month’s fall. They
said more reliable business surveys paint a “less gloomy picture. But
even they suggest that the recovery has ground to a halt.”







Still, German shares were getting a boost. Auto maker Volkswagen AG


/quotes/zigman/150411 DE:VOW3
+1.43%



rose 1.6% after the firm reported that November sales of its core
passenger-car brands rose nearly 15% from the year-earlier month. For
the first 11 months, sales rose 12% to almost 4.7 million vehicles.







Shares of fellow auto group BMW AG


/quotes/zigman/143329 DE:BMW
+1.30%



rose 1.9%. In Paris, Renault SA


/quotes/zigman/141795 FR:RNO
+2.03%



and Peugeot SA


/quotes/zigman/165939 FR:UG
+1.63%



were each up around 2%.






Some banks still under pressure








Lingering gloom over last week’s EU summit continued to weigh on sectors
such as banks, which have been beaten up throughout the sovereign-debt
crisis.







In France, the CAC 40 index


/quotes/zigman/3173214 FR:PX1
+0.17%



rose 0.4% to 3,103.27, helped by a 1% rise for energy group Total SA


/quotes/zigman/167939 FR:FP
+1.06%






/quotes/zigman/167990/quotes/nls/tot TOT
-0.28%



amid firmer oil prices.







But banks were a drag, with Societe Generale SA


/quotes/zigman/167380 FR:GLE
-2.98%



down 2%, BNP Paribas SA


/quotes/zigman/132276 FR:BNP
-2.80%



off 1.6% and insurer AXA SA


/quotes/zigman/163170 FR:CS
-2.49%



down 2.49%.







Fitch Ratings joined Moody’s Investors Service in issuing a downbeat
assessment of the EU summit. Moody’s also put eight Spanish banks and
two holding companies on review for possible downgrades late Monday due
to expectations of higher losses from commercial-real-estate exposure.







Banco Santander SA


/quotes/zigman/188106/quotes/nls/std STD
-1.45%






/quotes/zigman/205154 ES:SAN
+0.32%



and BBVA SA


/quotes/zigman/254684/quotes/nls/bbva BBVA
-4.82%






/quotes/zigman/226853 ES:BBVA
-1.25%



were not among the banks listed, but BBVA was still off over 1%.







The Spain IBEX 35 index


/quotes/zigman/2759618 XX:IBEX
+0.14%



rose 0.7% to 8,438.20 after an auction of Spanish 12- and 18-month
notes saw healthy demand and yields fell from similar auctions in
November.








/quotes/zigman/126329
MMB
18.87,
+0.59,
+3.20%


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30
20
10
11
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Away from the main index, shares of Lagardere SCA


/quotes/zigman/126329 FR:MMB
+3.20%



jumped nearly 5% after Deutsche Bank analysts upgraded the firm to buy from hold.







The FTSE 100 index


/quotes/zigman/3173262 UK:UKX
+0.93%



was up 0.7% at 5,466.65, with banks recovering from the prior-day’s rout. Shares of Lloyds Banking Group PLC


/quotes/zigman/126322 UK:LLOY
+2.85%






/quotes/zigman/255656/quotes/nls/lyg LYG
+0.65%



rose nearly 3% and Royal Bank of Scotland Group PLC


/quotes/zigman/530544/quotes/nls/rbs RBS
+1.86%






/quotes/zigman/155978 UK:RBS
+1.56%



rose 1.3%.







Resource stocks also contributed to the positive tone, with Rio Tinto PLC


/quotes/zigman/155899 UK:RIO
+3.03%






/quotes/zigman/182541/quotes/nls/rio RIO
+2.06%



up 1.7% and BP PLC


/quotes/zigman/247026/quotes/nls/bp BP
+1.17%






/quotes/zigman/210014 UK:BP
+1.70%



up 1.7%.







Shares of hotel and restaurant group Whitbread PLC


/quotes/zigman/445964 UK:WTB
-4.56%



fell nearly 5% after a trading update. The group said 13-week sales to
Dec. 1 rose 2.4% on a comparable basis and total sales rose 11.4%. The
group said trading conditions continue to be challenging.