Europe stocks rise on Irish news, US jobless claims

Europe's main stock markets rose on Thursday as investors took heart from news that Ireland could become the first eurozone nation to emerge from its bailout programme and US jobless claims declined for a third straight week, dealers said. But sentiment remained fragile before the start of a two-day European Union summit that will discuss a potential bailout for Cyprus. In afternoon trade, London's benchmark FTSE 100 index of top companies had added 0.28 percent to 6,499.36 points. Elsewhere, Frankfurt's DAX 30 index won 0.82 percent to 8,036.60 points and in Paris the CAC 40 gained 0.63 percent to 3,860.61 points. Shares also rose on Wall Street, where the Dow Jones Industrial Average increased 0.39 percent and the tech-heavy Nasdaq Composite index jumped by 0.38 percent. The broad-based S&P 500 lifted by 0.40 percent and is now less than five points below its all-time closing record. In foreign exchange activity, the euro eased to $1.2951 from $1.2956 late on Wednesday in New York. Gold prices fell to $1,585 an ounce on the London Bullion Market from $1,589.25. "European stock indices are all trading higher, buoyed by the prospect of Ireland becoming the first country to exit the bailout program later this year," said analyst Craig Erlam at traders Alpari. On Wednesday, Ireland returned to the 10-year bond market for the first time since it benefited from an international bailout in 2010, raising almost double the amount predicted by analysts. Dublin raised five billion euros ($6.48 billion) in an auction, while the rate of interest was 4.15 percent, the country's National Treasury Management Agency said. "Ireland completed its first auction of 10-year bonds yesterday, as it moved a step closer to exiting the bailout program, which has been viewed in the markets as the first time we’re seeing the positive side to austerity," added Erlam. "This also marks a shift from austerity to growth for Ireland which gives hope to other countries currently in the program." The decline in US unemployment benefit claims -- a sign of the pace of layoffs -- also added to market optimism. According to the Department of Labor, claims totalled 332,000 in the week ending March 9, a drop of 10,000 from the prior week. Later on Thursday, at 1600 GMT, EU leaders begin a two-day summit against a backdrop of anti-austerity protests elsewhere. The talks include a late-night eurozone-only meeting, leading into a gathering of eurozone finance ministers on Friday night -- when they aim to nail the terms for a bailout of Cyprus. The summit comes after a brash anti-austerity party won a stunning 25 percent of the vote in last month's Italian elections, in a warning for fiscal hardliners such as German Chancellor Angela Merkel who faces polls later in the year. "It’s the first day of EU summit in Brussels today, when very sensitive issues – the austerity measures and youth unemployment – will be discussed," added analyst Anita Paluch at trading firm Gekko Markets. "It will be interesting to see, which direction Europe is inclined to go in the face of the growing tensions and after Germany has recently presented new spending cuts. With different countries having different takes in the issue, ideological clash could occur." In company earnings news, meanwhile, German automaker BMW revealed that 2012 had been the best year in the company's history and forecast further sales growth this year. Group profit last year increased by 4.4 percent compared to 2011, to 5.1 billion euros ($6.6 billion), on 11.7 percent higher revenues to 76.8 billion euros, the company, which also produces the Mini and Rolls-Royce, said. On the back of its results, BMW group said it would propose increasing the dividend to 2.50 euros per share from 2.30 euros for 2011. However investors seemed unimpressed, and in afternoon trade on the Frankfurt stock exchange, BMW shares had fallen 0.52 percent to 70.9 euros.