LONDON (ShareCast) - Ahead of tomorrow's meeting in Brussels of finance ministers, European markets charged higher on hopes that the meeting will see some new measures unveiled that will go some way to resolving the region's sovereign debt issues.

Reports that the Eurozone´s European Financial Stability Fund may be used to guarantee the value of up to 30% of some periphery governments´ debt issues boosted sentiment.

Gloomy news was largely ignored in the euphoria; for instance, the Organisation for Economic Co-operation and Development cut its estimates for 2012 growth in the world´s gross domestic product to 1.6% from 2.8% before. “Scepticism has grown that euro-area policy makers can deal effectively with the key challenges they face ... Serious downside risks remain, linked to “loss of confidence in sovereign-debt markets and the monetary union itself,” the organisation´s chief economist warned.

Triple-digit gains were the order of the day among European benchmark indices. The Euro Stoxx 50 index advanced 111 to 2,222, the CAC 40 in Paris climbed 156 to 3,013 and the DAX in Frankfurt surged 252 to 5,745.

Bank shares had a field day as hopes of progress on the Eurozone crisis took hold. German bank Commerzbank recovered a chunk of last week's losses on reports that its supervisory board will meet on Friday to discuss measures to meet new capital requirements and to name a new financial director.

Shares of Commerzbank fell more than 15% last Tuesday on speculation over additional capital needs. It was rumoured that Commerzbank could increase capital by €5bn euros compared to an initial estimate of €2.9bn if the European Banking Authority applies new capital ratios for the sector.

French lender BNP Paribas was wanted on press reports that the bank is contemplating selling a portfolio of more than 50 private-equity fund holdings to raise around $700m.

Shares in Swiss group Bank Sarasin, however, took a nasty knock after Safra Group agreed to buy Rabobank´s stake in the outfit. Investors had apparently been expecting a larger offer from a rival bidder.

Belgian bank shares such as KBC and Dexia registered sharp gains following the positive results to this morning´s debt auction by their national Treasury.

The Belgian Treasury issued a total of €2.02bn in an auction of bonds maturing between 2018 and 2041, in line with its targets.

Management at Air France-KLM will present a two-stage recovery plan for next year after taking initial savings measures early in the year, reports La Tribune.

According to syndicate sources, a recovery and development plan should be presented following presidential elections and is expected to have an impact on employees.

OTHER MARKETS

The euro surged by 0.56% to $1.3313 against the dollar, though it was off its best levels for the day towards the end of the afternoon session.

West Texas sweet light crude for January delivery rose 73 cents to $97.50 a barrel in US trading, while the front month January futures contract Brent crude rose $1.48 to the $107.88 a barrel mark.

CAC 40 - Risers
Natixis SA (KN) € 1.93 +13.26%
AXA (CS) € 10.01 +13.11%
BNP Paribas (BNP) € 28.52 +10.33%
Societe Generale (GLE) € 17.35 +9.60%
Carrefour (CA) € 18.90 +9.16%
Credit Agricole (ACA) € 4.44 +8.88%
Schneider Electric (SU) € 39.08 +8.31%
ArcelorMittal SA (MT) € 12.67 +7.83%
GDF Suez (GSZ) € 19.53 +7.72%
Peugeot (UG) € 13.13 +7.54%

CAC 40 - Fallers
None

--
jh

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE