European stocks rise on good start to US earnings

European stock markets climbed on Wednesday following a positive start to the US earnings season that helped to offset weaker news closer to home, analysts said. In late morning deals, London's benchmark FTSE 100 index of top companies rose 0.35 percent to 6,074.79 points, Frankfurt's DAX 30 index added 0.12 percent to 7,705.34 points and the Paris CAC 40 advanced 0.16 percent to 3,711.90. The European single currency dipped to $1.3077 from $1.3079 late in New York on Tuesday. On the London Bullion Market, gold prices advanced to $1,663 an ounce from $1,656 on Tuesday. "The cautiousness that prevailed yesterday has dissipated and investors resumed buying after Alcoa kicked off the earnings season boosting risk appetite," said Gekko Global Markets trader Anita Paluch. "The aluminium giant's optimistic outlook on growth and demand lifted spirits creating positive atmosphere and setting a positive tone that helped to disregard the unemployment figures from the eurozone." US aluminium giant Alcoa said on Tuesday that it had swung back into profit during the final quarter of 2012 on strong operations and a one-off gain despite a weakening of the metal's price. Alcoa reported earnings of $242 million (185 million euros), compared with a year-earlier loss of $191 million. The results were boosted by a gain of $161 million related to the sale of a hydroelectric asset. "A return to profit after cost cutting and a bullish outlook for 2013 understandably has been taken well by the market," said Fawad Razaqzada, market strategist at GFT Market. Earnings news out of Europe was far less rosy, with French auto giant PSA Peugeot Citroen announcing a 16.5-percent plunge in annual sales on problems in southern Europe and Iran and despite strong demand from Russia and China. PSA, recently rescued by the French government and currently the second-biggest car manufacturer in Europe after German group Volkswagen, said sales fell below the three-million level last year to 2.965 million. PSA shares were down 0.9 percent to 6.16 euros in Paris deals following the trading update. In London, shares in British insurer Aviva fell 2.33 percent to 373 pence after the group said it had sold its remaining minority stake in Dutch insurer Delta Lloyd to unnamed investors for £353 million ($567 million, 433 million euros). The announcement comes a week after Mark Wilson began his reign as Aviva chief executive following a turbulent time for the company, Britain's second-biggest insurer after Prudential. Aviva said on Wednesday that it had sold its 19.4-percent holding for 12.65 euros ($16.55) per Delta share. Asian stock markets meanwhile closed mostly higher on Wednesday, snapping a recent losing streak thanks to Alcoa's earnings, traders said. "Alcoa's results are generally considered a bellwether for the global economy and the fact that the aluminium giant forecasts higher demand in 2013 appeased investors," noted Stan Shamu, a strategist at IG Market in Melbourne. However Wall Street ended in negative territory overnight, with the Dow falling 0.41 percent.