LONDON -- European stock markets looked set to finish the week on a high after some dire performance earlier in the week, as the EU summit in Brussels seems to have come out with some positive results.
The eurozone's leaders have agreed to restructure the terms surrounding the recent bailout of Spanish banks, which among other things will mean that the so-called "taxpayer-backed debt" will not get preferred debtor status and leaves the Spanish banks expecting to receive the injection of capital directly.
In addition, the summit resulted in a number of measures that would also ease Italy's requirements if it were to seek a bailout, making it more likely the country will be the sixth nation to do so. As you might expect, the Spanish IBEX
The banking sector has been the main benefactor of this news in Europe, with a broad risk-on attitude sweeping the continent's financial majors (although not necessarily banks in London). In addition, the Basel committee said it will be easing the capital ratio requirements for European banks, which have previously been drafted and deemed by many as too severe. With this, BNP Paribas (NASDAQOTH: BNPQY.PK) was one of the best performers on the CAC-40, up more than 5.7%.
Away from the banking sector, industrial and manufacturing stocks also saw strong gains amid this return in confidence. A bounce in commodity prices offered additional support as the prospects for better-than-expected revenues begin to surface. Ireland's CRH
In a similar fashion, the auto majors made decent headway in European trade, led by Germany's Daimler (NASDAQOTH: DDAIF.PK) after the company announced that is has agreed to a deal with Nissan to jointly supply each other with light-duty trucks in Japan. Daimler's Mitsubishi Fuso will supply Nissan with its Canter truck, in exchange for Nissan's smaller Atlas F24.
On the other side of the market, France's Suez Environnement (NASDAQOTH: SZEVY.PK), Europe's second-largest water utility, saw some heavy losses on the otherwise buoyant day, down 7% in Paris after giving a profit warning. The company said profits would be hit by the uncertain economic outlook in Europe and as one of its Australian contract faces further delays. It said they now expect earnings before interest, taxes, depreciation, and amortization (EBITDA) to be flat in 2012.
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