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European equities stage rebound

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(Globalpost/GlobalPost)

European stock markets rebounded slightly on Wednesday following two days of losses caused by Cyprus' bailout uncertainty, as investors looked ahead to Britain's latest annual budget announcement.

London's benchmark FTSE 100 index of top companies rose by 0.15 percent to 6,451.18 points in late morning deals, while Frankfurt's DAX 30 added 0.56 percent to 7,992.59 points and in Paris the CAC 40 advanced 0.74 percent to 3,803.51.

Elsewhere, Madrid's IBEX 35 shares index jumped 0.91 percent and Milan's FTSE MIB gained 0.55 percent in value.

"Many would have thought that the vote rejection by the Cypriot parliament last night and extension of the closure of its banks would have sent investors to the hills and peripheral borrowing costs soaring, but that simply hasn't happened," said Angus Campbell, head of market analysis at Capital Spreads trading group.

Eurozone member Cyprus was on Wednesday scrambling to secure funding vital to an international bailout after MPs rejected the terms of an EU deal, tapping Russia, the church and state institutions for cash.

With banks closed and fears growing of a forced eurozone exit, President Nicos Anastasiades huddled with party leaders and financial experts trying to track a way out of the island's worst crisis since the 1974 Turkish invasion.

The meeting comes a day after lawmakers flatly rejected a highly unpopular measure that would have slapped a one-time levy of up to 9.9 percent on bank deposits as a condition for an EU-led 10-billion-euro ($13-billion) loan.

Asian stock markets closed mixed on Wednesday in the wake of the Cyprus vote.

The European Central Bank has said it will continue to provide financial support for troubled Cypriot banks, a key step to allow all sides a little more time to try to find a way out of the impasse.

But Stan Shamu, market strategist at IG Markets in Melbourne, offered a word of warning, saying: "The Cyprus issue is far from over.

"I don't think it will be a situation where the ECB has stepped in and we don't have to worry about it."

In foreign exchange activity, the euro grew to $1.2922 from $1.2881 in New York late on Tuesday. The British pound was up versus the dollar and steady against the euro ahead of the budget.

Gold prices edged up to $1,611.50 an ounce on the London Bullion Market from $1,610.75 on Tuesday.

European banks' share prices meanwhile recovered on Wednesday after heavy losses in recent days amid concerns over the sector's exposure to Cyprus, and a potential deepening in the eurozone's long-running sovereign debt crisis that has already sparked bailouts for Greece, Ireland and Portugal.

In London, Britain's state-rescued Royal Bank of Scotland won 1.75 percent to 298.75 pence, while Deutsche Bank gained 1.30 percent to 32.42 euros in Frankfurt and French lender BNP Paribas climbed 1.0 percent to 41.38 euros in Paris.

British finance minister George Osborne was meanwhile Wednesday set to stick firmly to the government's controversial austerity plan when he presents his latest annual budget to parliament despite a promise to spend on infrastructure, as Britain sails close to another recession.

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http://www.globalpost.com/dispatch/news/afp/130320/european-equities-stage-rebound