Euro shares higher on defensive names; DAX up 0.33%

Investing.com - European stock markets closed higher Tuesday, led by gains in defensive stocks, however sentiment remained weak as concerns over the results of Spain’s financial bailout and the outcome of upcoming elections in Greece weighed.

At the close of European trade, the EURO STOXX 50 climbed 0.27%, France’s CAC 40 rose 0.14%, while Germany’s DAX 30 advanced 0.33%.

Traders acted with bullish caution as the exact amount Spain is to receive to recapitalize its banks will only be decided later this month, after the results of independent audits are published. In addition, questions remained over the source of the funds and whether the bailout repayments would add to the country’s already high borrowing costs. 

Investors also remained jittery ahead of Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.

French construction company Lafarge was one of the session’s top gainers, with shares jumping 1.16% after saying that it expects to generate at least EUR1.75 billion in earnings before interest, taxes and depreciation for the four years from 2012 through 2015. 

Remy Cointreau also gained 0.82%, as France’s second-biggest distiller said full-year operating profit excluding one-off items rose 24% to EUR208 million.

Meanwhile, financial stocks remained broadly lower, led by Italian lenders Unicredit and Intesa Sanpaolo, down 2.58% and 2.23% respectively, as attention began to shift to budgetary difficulties in Italy.

France’s BNP Paribas and Societe Generale were also lower, with shares falling 0.13% and 0.09%, while German lenders Deutsche Bank and Commerzbank declined 0.21% and 1.32%.

In Spain, shares in BBVA climbed 0.76% and Banco Santander edged down 0.10%. Fitch ratings agency downgraded the banks by two notches on Monday.

In London, FTSE 100 advanced 0.41%, after data showed that showed that manufacturing output in the U.K. fell more-than-expected in April, while a separate report showed that industrial production was flat.

Shares in telecom company Vodafone jumped 1.15%, after the U.K. Department of Economic Affairs said it had decided not to examine a possible breach of the 74% FDI cap by Vodafone and told the prime minister's office there is no need to relook at the FIPB approval given to the Hutch-Vodafone deal in 2007.

Elsewhere, British American Tobacco surged 1.84% after saying on Monday that it purchased 250,000 of its ordinary shares of 25 pence each, adding that it intends to hold these shares in Treasury.

Mining giants Rio Tinto and Bhp Billiton also turned higher, climbing 0.59% and 0.91% respectively, as did copper producers Xstrata and Kazakhmys, up 0.37% and 0.43%.

Meanwhile, U.K. lenders trimmed losses but remained under pressure. Shares in Barclays tumbled 1.15% and the Royal Bank of Scotland fell 0.38%, while Lloyds Banking edged down 0.12%. HSBC Holdings, on the other hand, held gains, rising 0.39%. 

In the U.S., equity markets traded higher with the Dow Jones Industrial Average up 0.87%, the S&P 500 ahead by 0.48%, while the tech heavy Nasdaq jumped 0.69%.

Investors are anticipating New Zealand’s rate statement, U.S. core retail sales and PPI on Wednesday.