Investors' confidence rises
November 7, 2012
European stocks rallied in early trading on Wednesday on the back of President Obama's re-election and widespread expectations that the Federal Reserve's quantitive easing policy would continue.
The Eurofirst 300 index of top European shares was up 0.5 percent within minutes to reach 1.119 points, a level not seen in two weeks. Germany's blue-chip DAX 30 rose by 0.6 percent, with shares of reinsurer Munich Re jumping over 3.0 percent, thus making them the biggest gainer after the Frankfurt Stock Exchange opened.
"The fact that the election is over is obviously positive for the market," Mark Priest from ETX Capital said in a statement. "Markets don't like uncertainty and there was always the worry that it was going to drag on."
From Washington to Athens
But gains in Europe's stock markets were expected to be rather limited as the balance of power in the US Congress stayed mostly unchanged, sustaining the risk of a fiscal standoff in talks on spending cuts and tax increases.
Also, market attention is likely to switch to Greece later in the day where the parliament is scheduled to vote on a controversial austerity package that would pave the way for a fresh injection of aid from international lenders.
"A lot depends on this vote on Wednesday in Greece, so I think it will be a little bit of a wait-and-see," Mark Priest said.
hg/hc (dpa, Reuters)