European stocks edge higher ahead of Italy vote; DAX jumps 1.78%

Investing.com - European stock markets edged higher on Tuesday, as investors remained cautious over the outcome of a key parliamentary vote in Italy later in the day.

During European morning trade, the EURO STOXX 50 climbed 1.91%, France’s CAC 40 advanced 1.57%, while Germany’s DAX 30 jumped 1.78%.

Investors were jittery ahead of a key vote in Italy on public finances that will test Prime Minister Silvio Berlusconi's majority in parliament and determine if he has enough support to stay in power and implement austerity measures, after Italy’s borrowing costs surged to euro-era highs on Monday.

Meanwhile, Greece was to announce the new head of an interim government later Tuesday, amid ongoing efforts to avoid a potential default.

But the financial sector was broadly higher as France's second largest bank Societe Generale saw shares surge 6.90% despite reporting that third-quarter profit fell 31%, due to a write down on Greek sovereign debt and lower trading revenue.

BNP Paribas jumped 2.14% after saying last week that it was writing off 60% of the value of all the Greek debt it holds. Both banks had announced in September steps leading to trim a combined EUR300 billion of assets by 2013.

Meanwhile, Germany's Deutsche Bank saw shares rise 1.63% after recording lower investment-banking revenue, and Italian lenders Intesa Sanpaolo and Unicredit soared 3.54% and 2.34% respectively, as the country's 10-year government bond yields hit 14-year highs.

In London, FTSE 100 fell advanced 1.20%, led by a strong gains in financial stocks.

Lloyds Banking was among the U.K.'s top gainers with shares surging 7.04% and the Royal Bank of Scotland jumping 2.62%, while HSBC Holdings and Barclays climbed 1.61% and 1.41%.

Elsewhere, Vodafone saw shares advance 2.63% after edging its full-year outlook higher as growth in emerging markets and robust trading in northern Europe helped the world's largest mobile operator to post first-half results ahead of forecasts.

Energy stocks also contributed to gains, as shares in mining giants Rio Tinto and Bhp
Billiton rose 0.92% and 1.22%, while British Petroleum saw shares jump 1.01%.

Copper producers Xstrata and Kazakhmys advanced 1.67% and 1.18% respectively.

Elsewhere, U.S. equity markets pointed to a slightly higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.46%, S&P 500 futures signaled a 0.43% increase, while the Nasdaq 100 futures indicated a 0.58% gain.

Also Tuesday, finance ministers from the European Union member states were to meet in Brussels to discuss the region’s ongoing financial crisis.