By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets climbed on Wednesday, taking inspiration from the prior day’s gains on Wall Street, as investors welcomed better-than-expected German consumer-confidence data.
The Stoxx Europe 600 index XX:SXXP +0.43% rose 0.4% to 323.54, after closing at the lowest level in almost two weeks on Tuesday. The advance mirrored gains in the U.S., where the Nasdaq Composite closed above 4,000 for the first time since 2000 on Tuesday. Stock futures also pointed to a higher open on Wednesday.
“Equity markets are without any doubt in a Santa rally mood, and there is still more potential for an upward move by the end of this year. However, we may see some profit-taking ahead of next week’s U.S. employment data, which could flare up the tapering talk,” said Naeem Aslam, chief market analyst at AvaTrade.
“The economic data released in Germany showed that the consumer climate is improving, and this could add tailwinds for the euro region’s growth. However, the strength of the euro is still a major concern for most of the peripheral economies, where the unemployment rate stays stubbornly higher,” he added.
Data out of Germany showed consumer confidence there rose to the highest in more than six years, buoyed by a robust jobs market and solid income expectations. The forward-looking GfK consumer-confidence indicator for December came in at 7.4, up from 7.1 in November and beating analyst expectations.
Also in Germany, the biggest political parties early Wednesday agreed to forge a coalition government led by Angela Merkel.
Merkel’s conservative Christian Democratic Union, its Bavarian Christian Social Union sister party and the Social Democrats agreed after 17 hours of negotiations to introduce a national minimum wage and toughen labor-market rules, as well as boost spending on pensions, education and infrastructure.
Meanwhile, data in the U.K. confirmed that the economy grew 0.8% in the third quarter, driven by the fastest rise in household spending in more than three years.
The German DAX 30 index DX:DAX +0.34% rose 0.2% to 9,312.15, on track for an all-time closing high.
France’s CAC 40 index FR:PX1 +0.24% picked up 0.2% to 4,286.61, and the U.K.’s FTSE 100 index UK:UKX +0.16% added 0.1% to 6,643.55.
Among notable movers in the indexes, shares of United Utilities Group PLC UK:UU +1.52% rose 1.6% in London after the water supplier raised dividends 5%, as higher prices boosted revenue and profit.
Compass Group PLC UK:CPG +2.32% gained 2.9% after the catering firm said it will return 500 million pounds ($810 million) to shareholders via a buyback program, as it reported a rise in full-year sales.
HeidelbergCement AG DE:HEI +1.27% climbed 1.2% in Frankfurt after Berenberg lifted the firm to buy from hold.
On a more downbeat note, shares of Veolia Environnement SA FR:VIE -1.89% dropped 1.9% after Electricite de France SA FR:EDF +0.04% late Tuesday sold its stake in utility and waste management firm. EDF shares were slightly higher.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
