European stocks sharply higher amid easing speculation; Dax jumps 1.38%

Investing.com - European stocks were sharply higher on Tuesday, as a recent string of disappointing economic reports from the euro zone fuelled expectations for a rate cut by the European Central Bank.

During European morning trade, the EURO STOXX 50 rallied 1.46%, France’s CAC 40 rallied 1.36%, while Germany’s DAX 30 jumped 1.38%.

In a report, Markit research group said that Spain's service sector purchasing managers' index fell to 44.7 in February from a reading of 47 the previous month, compared to expectations for a decline to 46.

Separately, Markit said Italy's services PMI ticked down to 43.6 last month, in line with expectations, from a reading of 43.9 in January.

The data came amid concerns that Italy will be unable to pass structural reforms and austerity measures as the country edged closer to fresh elections after inconclusive elections last week.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale rallied 1.84% and 2.93%, while Germany's Deutsche Bank and Commerzbank surged 2.90% and 1.72% respectively.

Peripheral lenders added to gains, with Spanish banks BBVA and Banco Santander climbing 1.37% and 1.56%, while Italy's Unicredit and Intesa Sanpaolo advanced 2.36% and 2.41%.

Elsewhere, Deutsche Post soared 4.18% after Europe’s biggest postal service said fourth-quarter net income amounted to EUR542 million, topping analysts' estimates.

In London, commodity-heavy FTSE 100 advanced 0.74%, boosted by sharp gains in mining stocks.

Copper producers posted strong gains, led by Xstrata, up 2.91%, while rival Kazakhmys surged 2.32%.

Glencore, which is seeking to buy Xstrata, was up 2.18% after posting full-year adjusted net income of USD3.06 billion.

Mining giants BHP Billiton and Rio Tinto were also on the upside, with shares advancing 0.69% and 1.14%, while Eurasian Natural Resources jumped 1.17%.

Meanwhile, U.K. lenders tracked their European counterparts higher. HSBC Holdings inched up 0.02% and Barclays climbed 1.44%, while Lloyds Banking and the Royal Bank of Scotland saw shares rally 1.89% and 2.20% respectively.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.19% gain, S&P 500 futures signaled a 0.16% rise, while the Nasdaq 100 futures indicated a 0.22% increase.

Later in the day, the U.S. Institute of Supply Management was to release a report on service sector activity.