European stocks higher with Bernanke in focus; DAX up 0.6%

Investing.com - European stocks were higher during early European trade on Tuesday, as market participants looked ahead to Federal Reserve Chairman Ben Bernanke's semi-annual testimony to the U.S. Congress later in the day, amid speculation he will hint at further monetary policy easing.

Gains were limited as investors continued to worry over downbeat global growth prospects and its impact on company earnings.

During European morning trade, the EURO STOXX 50 rose 0.7%, France’s CAC 40 added 0.6%, while Germany’s DAX 30 advanced 0.6%.

Market sentiment remained supported ahead of testimony to the Senate by Federal Reserve Chairman Ben Bernanke later Tuesday and Wednesday, amid ongoing speculation over whether the U.S. central bank will introduce more easing to stimulate the economy.

Expectations for another round of easing by the bank were boosted on Monday after official data showing a third consecutive monthly decline in U.S. retail sales in June.

Meanwhile, hopes for additional stimulus measures from China mounted after Chinese Premier Wen Jiabao said over the weekend that policy makers were likely to introduce measures to boost growth in the second half of the year

The comments followed government data released last week showing China’s second quarter economic growth slowed to a three-year low of 7.6%, compared to growth of 8.1% in the first quarter.

A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.

The International Monetary Fund on Monday reduced its outlook for global growth to 3.5% from its April forecast of 3.6%, citing the impact of the euro zone’s ongoing debt crisis on emerging market economies.

Concerns over the lack of substantial progress in tackling the euro zone’s sovereign debt crisis also weighed.

Germany’s constitutional court announced Monday that it will not deliver a ruling on whether the euro zone’s permanent bailout fund contravenes the German constitution until September 12, disappointing hopes for an earlier decision.

Shares in French telecommunications equipment giant Alcatel Lucent plunged 14.5% after warning that full-year adjusted operating-profit margin will likely come in below estimates, citing “year-to-date performance and the difficult macro-economic environment.”

Elsewhere, in London, the FTSE 100 was little changed as investors awaited the release of U.K. data on inflation.

Shares in building supplies group Wolseley dropped 3.5% after warning that it was suffering from ongoing “difficult market conditions” in continental Europe. The firm said it would review the carrying value of some assets, which is likely to give rise to a noncash impairment charge.

But shares in Barclays were higher, gaining 1.5%, as the Libor manipulation scandal remained in the spotlight.

Bank of England Governor Mervyn King and other BoE policymakers will appear before parliament later in the session to discuss the latest Financial Stability Report.

Elsewhere, in the U.S., equity markets pointed to a higher open, with market focus shifting to the next policy move from the U.S. and a slew of corporate earnings, including Yahoo! and Goldman Sachs.

The Dow Jones Industrial Average futures pointed to a 0.5% gain, S&P 500 futures signaled a 0.5% rise, while the Nasdaq 100 futures indicated a 0.55% increase.

Later in the day, the ZEW Institute was to release reports on economic sentiment in Germany and the wider euro area. Meanwhile, the U.S. was to publish official data on consumer price inflation, as well as reports on the capacity utilization rate and industrial production.