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Europe: Stock markets lifted by firmer financial shares
[LONDON] European stock markets rose on Tuesday, helped by gains in the banking sector, although weaker mining share prices held back the British market.
The pan-European FTSEurofirst 300 index was 1.5 per cent higher at its close while the euro zone's blue-chip Euro STOXX 50 index advanced 1.8 per cent.
Britain's blue-chip FTSE 100 index was up 1 per cent at its close, underperforming bigger gains of 1.9 per cent on Germany's DAX and 1.8 per cent on France's CAC.
The London market's relative underperformance was due to a fall in mining stocks, which account for around 5 per cent of the FTSE's overall market capitalisation.
The mining sector lost ground on Tuesday as the price of copper touched its lowest in more than a week and aluminium fell on concerns about demand from China, which is the world's biggest consumer of metals. "The UK index is struggling to match its euro zone peers, hampered by the mining sector," said Spreadex analyst Connor Campbell.
With many traders away for the Christmas holiday season, trading volumes were just over half of the FTSEurofirst's three-month daily average.
Deutsche Bank rose 2.5 per cent following its move to sell its 20 per cent stake in China's Hua Xia Bank to insurer PICC Property and Casualty Co for up to 25.7 billion yuan (S$5.65 billion).
Deutsche Bank's share price rise enabled the STOXX Europe 600 Banking Index to advance 1 per cent.
Italian cable systems company Prysmian also outperformed, rising 3 per cent after announcing a new contract win in Bahrain.
Naeem Aslam, chief market analyst at brokerage AvaTrade, said European stocks looked well-placed for 2016, given measures by the European Central Bank to support the euro zone economy. "European markets still remain the place to invest, with the ECB pumping more money into the system," said Aslam.
The FTSE is down by around 4 per cent since the start of 2015, underperforming a rise of 6 per cent on the pan-European FTSEurofirst 300 index.