European stocks hold gains after Spanish auction; DAX up 0.42%

Forexpros - European stocks remained higher on Tuesday, after a successful Spanish government bond auction and as market sentiment improved on hopes for fresh action by the European Central Bank to stem the debt crisis in the euro zone.
During European afternoon trade, the EURO STOXX 50 climbed 0.57%, France’s CAC 40 advanced 0.60%, while Germany’s DAX 30 rose 0.42%.
The U.K.’s Telegraph newspaper said earlier that it could confirm weekend reports that the European Central Bank may set a cap on peripheral euro zone bond yields at its next policy meeting in September.
On Monday, the ECB dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
Speculation over the possibility of ECB intervention saw Spanish borrowing costs fall at an auction of short-term government debt, with Madrid successful auctioning EUR4.5 billion of bills, the top end of the target range.
Market participants were also anticipating the minutes of the Federal Reserve’s August policy meeting later in the week, amid speculation over how close the U.S. central bank may be to implementing another round of stimulus measures.
Financial stocks remained broadly higher, led by Italian lender Intesa Sanpaolo, up 3.48%, and closely followed by Dutch bank ING Group, whose shares surged 2.82%.
France’s BNP Paribas and Societe Generale also added to gains, with shares rallying 2.07% and 1.88%, while German lenders Deutsche Bank and Commerzbank extended earlier gains, advancing 1.90% and 1.05%.
On the downside, Lindt & Sprungli slipped 0.30% after saying that Europe’s chocolate market remained “flat” in the first half of 2012.
In London, FTSE 100 added 0.30%, after data showed that public sector net borrowing in the U.K. posted a surplus of GBP1.8 billion in July, compared to a deficit of GBP12.2 billion in June.
Oil and gas major Anglo American remained one of the session’s top gainers, with shares soaring 2.13%, while mining companies Vedanta Resources and Evraz rallied 2.70% and 2.06%.
Rio Tinto and BHP Billiton were also sharply higher, climbing 1.69% and 1.54% respectively, while copper producer Xstrata jumped 1.02%, erasing earlier losses, amid expectations for Glencore to stick to its USD30 billion offer for Xstrata.
The company was expected to report first-half profits dented by falling prices, dashing hopes of an improved offer for the time being.
Separately, Lonmin, which has seen its platinum mine in South Africa shut down by strike action, surged 2.38% after Executive Vice President for Mining Mark Munroe said striking miners who don’t return to work on Tuesday may keep their jobs.
In the financial sector, stocks held gains. Shares in Barclays rallied 1.93 and the Royal Bank of Scotland climbed 1.77%, while Lloyds Banking and HSBC Holdings advanced 0.78% and 0.20% respectively.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.18% rise, S&P 500 futures signaled a 0.18% increase, while the Nasdaq 100 futures indicated a 0.26% gain.
Trade looked likely to remain subdued on Tuesday, with no significant economic data releases on the calendar, while volumes were light with many market participants on summer holidays.