LONDON: European stock markets rose on Wednesday, lifted by gains for banking shares as the ECB offered up cheap loans to lenders across the eurozone amid fears of a fresh credit crunch, boosting the euro. Frankfurt's DAX 30 jumped 0.90 percent to 6,947.06 points in late morning deals, the Paris CAC 40 advanced 0.78 percent to 3,479.83 points and in London the FTSE 100 climbed 0.13 percent to 5,935.81 Madrid rallied 0.83 percent and Milan by 1.16 percent. "European stock markets gained ground gauging the impact of ECB second and probably the last round of long-term refinancing operation that aims at injecting more liquidity into banking sector," said Anita Paluch, a trader at Gekko Global Markets. "Naturally, banks' shares are firmer this morning as they are the institutions to profit from the second shot of cheap money." Banks were at the top of the leaderboards, with Societe Generale gaining 2.81 percent to 24.88 euros, Deutsche Bank up 1.92 percent at 35.7 euros and Barclays winning 1.95 percent to 248.15 pence. The European Central Bank announced on Wednesday that it had made available 529.53 billion euros ($712 billion) to eurozone banks via its second three-year refinancing operation. The ECB said it had fully allotted the total amount in bids from 800 banks at rate of 1.0 percent. That is higher than the 489.19 billion euros awarded at the first-ever three-year auction on December 21 and exceeding analysts' expectations. As part of a series of recent measures, the ECB has decided to offer as much as banks want at exceptionally low interest rate to help promote lending between banks. At the first long-term refinancing operation ( LTRO), about 523 banks lined up to borrow a record almost 490 billion euros . Such an influx of liquidity can meanwhile encourage investors to turn toward assets deemed riskier, such as the euro, and away from currencies currently seen as safe havens, such as the dollar and yen. In foreign exchange trade following the ECB's announcement, the European single currency was slightly higher at $1.3471 compared with a level of $1.3466 late in New York on Tuesday. Investors were also looking ahead to Thursday, when Europe's leaders were to sign a long-crafted treaty designed to end years of deficits and debt, but efforts to reinforce a financial firewall remained stuck. The European Union summit has though suffered a substantial last-minute cut when a eurozone meeting planned for Friday to discuss strengthening the bloc's emergency resources was cancelled. Asian stocks markets mostly extended recent gains after Wall Street's Dow Jones Industrial Average closed overnight above 13,000 points for the first time since the financial crisis five years ago. "It's proof that confidence has returned to the market," said Gregori Volokhine at Meeschaert New York.

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