European stocks push higher, focus remains on Cyprus; Dax up 1.04%

Investing.com - European stocks pushed higher on Wednesday, as markets continued to focus on developments in Cyprus after the country's parliament rejected a proposed bank deposit tax, which formed part of a EUR10 billion international bailout deal.

During European afternoon trade, the EURO STOXX 50 surged 1.52%, France’s CAC 40 rallied 1.22%, while Germany’s DAX 30 jumped 1.04%.

Cyprus’s President Nicos Anastasiades called an emergency meeting with political leaders to look at alternatives after parliament rejected the terms of the bailout agreement.

Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.

Sentiment improved however, amid growing expectations that the European Union will renegotiate a deal with Cyprus to keep the country in the euro zone.

Financial stocks remained broadly higher, as French lenders BNP Paribas, while Germany's Deutsche Bank and Commerzbank rallied 1.37% and 1.26% respectively.

Earlier in the day, Deutsche Bank cut its reported profit for 2012 after setting aside additional money to cover legal costs linked to U.S. mortgage lawsuits and other regulatory probes.

Peripheral lenders added to gains, with Italian banks Intesa Sanpaolo and Unicredit climbing 0.34% and 1.13%, while Spain's BBVA and Banco Santander jumped 1.66% and 1.25%.

In London, FTSE 100 added 0.20%, after the minutes of the Bank of England’s March meeting showed that policymakers remained split over more easing, while elsewhere data showed that the U.K. unemployment rate held steady February.

Mining stocks turned broadly lower, as shares in BHP Billiton tumbled 1.11%, while rivals Eurasian Natural Resources and Evraz plunged 3.63% and 3.53% respectively.

Meanwhile, financial stocks remained mixed, as shares in HSBC Holdings eased up 0.06% and the Royal Bank of Scotland rallied 2,01%, while Barclays and Lloyds Banking retreated 0.36% and 0.32%.

Elsewhere, insurer Aviva plummeted 2.69% amid reports that almost 1,500 jobs could be lost if the company pulls out of Perth, Scotland. The firm was said to be considering relocating to Glasgow when the lease on its Pitheavlis office expires in 2014.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.26% rise, S&P 500 futures signaled a 0.27% increase, while the Nasdaq 100 futures indicated a 0.49% gain.

Also Wednesday, the European Central Bank said its current account surplus narrowed to EUR14.8 billion in January from a surplus of EUR16 billion the previous month, compared to expectations for a decline to EUR7.9 billion.

Investors were looking ahead to the outcome of the Federal Reserve’s policy meeting later in the trading day, after data last week showing that U.S. inflation was contained left the way clear for the bank to continue its asset purchase program.

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