European stocks mixed ahead of EU discussions; DAX up 1.15%

Investing.com - European stock markets were mixed to higher on Monday, as investors turned to a teleconference meeting of European Union finance ministers with hopes of new signs of progress in tackling the euro zone’s debt crisis.

During European afternoon trade, the EURO STOXX 50 surged 1.35%, France’s CAC 40 jumped 1.14%, while Germany’s DAX 30 climbed 1.15%.

EU ministers were to discuss plans to provide up to EUR200 billion in loans to the International Monetary Fund, as well as changes to the EU treaty that would allow a permanent EUR500 billion bailout fund to be established.

Meanwhile, investors remained concerned over the possibility of mass credit rating downgrades in the euro zone after Fitch Ratings put six euro zone nations on watch for downgrades on Friday, saying a "comprehensive solution" to the region's debt crisis was "technically and politically beyond reach."

Moody's cut Belgium by two notches to Aa3 from Aa1, citing risks to economic growth and the costs of bailouts of banks such as Dexia.

Financial stocks turned sharply higher as shares in BNP Paribas surged 4.18% and Societe Generale climbed 1.37%, while German lenders Deutsche Bank and Commerzbank jumped 1.75% and 2.99%.

Peripheral lenders also contributed to gains, with Italy’s Unicredit and Intesa Sanpaolo soaring 5.73% and 5.26% respectively, while Spanish BBVA climbed 2.11%.

Europe’s biggest automaker Volkswagen jumped 3.10% after reporting that its luxury unit, Audi AG, expects to sell 1.3 million cars in 2011, while BMW surged 2.90% and Daimler jumped 1.63%.

Elsewhere, Air Berlin rallied 8.55% after saying that Etihad Airways will increase its stake in the company to 29.2 percent.

In London, commodity-heavy FTSE 100 slipped 0.11%, as energy and mining stocks remained broadly lower.

British Petroleum saw shares drop 2.26%, extending earlier losses, while Vedanta Resources tumbled 2.39%.

Copper producer Xstrata declined 0.54%, while mining giants Bhp Billiton and Rio Tinto dropped 1.15% and 0.84%.

Meanwhile, U.K. lenders were mixed. Lloyds Banking plunged 2.20% and Barclays fell 0.43%, while the Royal Bank of Scotland and HSBC Holdings added 0.30% and 0.57% respectively.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.47%, S&P 500 futures signaled a 0.59% increase, while the Nasdaq 100 futures indicated a 0.65% gain.

Also Monday, the European Central Bank said that the euro zone current account recorded a deficit of EUR7.5 billion in October, swinging from a surplus of EUR2.2 billion the previous month.

Analysts had expected the region’s current account to post a deficit of EUR1.9 billion in October.