European Stock Market, 17 January: China News, Bond Sales Drive Markets Up

European stocks rose across the board on Tuesday with a stream of good news feeding the markets.  The Euro Stoxx 600 rose 0.9%, closing at its highest level since August.  National benchmarks across Europe were up as well, with the DAX gaining 1.8%, the CAC 40 increasing 1.4%, the FTSE 100 moving up 0.7%, and the IBEX rising 1.01%.

The most major news across global business was China’s report on GDP.  The Chinese Statistics Bureau announced that their economy, the second-largest in the world, increased at a rate of 8.9% during the fourth quarter of 2011.  Despite this being the slowest rate of growth in almost two and a half years, this still exceeded average economist estimates.  This was an encouraging sign, showing that the global economy may not be as bad as previously thought, though some economists believe that Chinese GDP growth will continue to slow throughout the course of 2012.

Spain auctioned bonds on Tuesday with success, selling €4.88 billion in treasury notes.  This came in on the high end of analyst expectations following Spain’s recent two-level downgrade by S&P last week.  The yield for the 12-month note sits at 2.049% and the 18-month bond is at 2.399%.
 
S&P continued their downgrading frenzy by this time hitting the European Financial Stability Facility, also referred to as the European bailout or rescue fund.  It was dropped from a rating of AAA to AA+; this downgrade follows multiple European nations which were dropped last Friday. 

German investor confidence rocketed up in January from -53.8 to -21.6, another sign that economic conditions are better than initially estimated.  This is the largest month-to-month jump in the history of the index.

In commodities markets, Brent crude fell slightly (by around 0.2%) to trade at a little above 111.00; gas oil also decreased by 0.68% to finish at 951.25.  Light sweet crude has posted a large gain, once again crossing the 100.00 mark.

Gold also saw a substantial increase on Tuesday, rising 1.6% to 1,656.50.  Copper was also a big mover, rising 2.23% to 371.80/lb.

In currencies, the Euro rose against the US Dollar to 1.2739 USD; the British Pound also rose versus the dollar to 1.5354 USD.  Finally, the Euro gained ground against the Australian Dollar, moving to 1.2256 AUD.