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European equities rally on U.S. budget deal hopes

Publish Date29/11/2012 01:37:30 PM

Last Update29/11/2012 01:50:40 PM

European equities rally on U.S. budget deal hopes

European stocks maintained the rally in afternoon trading Thursday, fueled by cautious optimism about the U.S. fiscal cliff amid growing speculation that U.S. President Barack Obama will reach an accord with Congress over a new budget.

As of 07:45 a.m. EST, The benchmark index for Europe, the STOXX 600 was up 0.83 percent at 275.41, and the STOXX 50 was higher by 0.69 percent at 2,573.08.

Equities rose to their highest level in three weeks, as U.S. stock futures and Asian shares rallied amid hopes that U.S. lawmakers and the U.S. President will clear a passage for the a budget deal before the end of this year.

Democrats and Republicans are still scrambling to prevent roughly $600 billion of automatic tax hikes and spending cuts from coming into effect early January. However, Mr. Obama hinted that a deal could be reached before Christmas. 

The U.S. President and Republican Speaker John Boehner met with top business leaders on Wednesday, where they discussed detailed plans and actually spread some hopes that a deal could is underway to avoid the forthcoming fiscal cliff.

On the economic front, a European Commission report also shouldered equities after it showed that economic confidence in the euro area rose in November from a three-year low. The index rose to 85.7 from a revised 84.3 in October.

The Swiss economy rose unexpectedly in the third quarter at the fastest pace in almost two years. Switzerland`s gross domestic product rose 0.6 percent, following a 0.1 percent decline in the second quarter, beating expectations of 0.2 percent growth.

As of 07:31 a.m. EST, the French CAC 40 was up 0.99 percent at 3,550.03, German DAX was up 0.70 percent to 7,394.91, while FTSE 100 was higher by 0.89 percent at 5,855.12. The euro rose to $1.8994 from $1.2951, while the pound gained to $1.6043 from $1.6016.

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