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Insurers lead Europe higher
LONDON, England (CNN) -- European markets strengthened at midday on Tuesday, bolstered by a resurgence in insurance stocks and signs of another positive session later on Wall Street. London's FTSE 100 was up 3.4 percent to 4,064.4, while Frankfurt's electronically traded Xetra Dax rose 5.9 percent to 3,017.64 and the CAC 40 blue chip index in Paris gained 5.4 percent to 3,042.01. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 4.4 percent -- led by the insurance, computer, electronics and information technology sub-sectors. "A number of insurance companies have reduced their exposure to the equity market to the extent where their sensitivity to the downside from here is not as great as it was, so people are re-examining them," Jeremy Podger, a pan-European fund manager at Investec Asset Management, told Reuters. Among the top gainers in the sector were Germany's Munich Re (FMUV2), Europe's biggest re-insurer, which jumped 11.4 percent to 134.94 euros, while Swiss Re gained 9.3 percent to 99.60 Swiss francs. Europe's largest insurer, Allianz (FALZ) rose 9.2 percent to 101.24 euros, France's AXA (PCS), the No. 2 insurer, added 10.8 percent to 13.25 euros and Zurich Financial, Europe's third largest, rose 12 percent to 168 Swiss francs. The UK's Royal & Sun Alliance (RSA) gained 9 percent to 105.75 pence and Aviva (AV) increased 8 percent to 470.1 pence. Meanwhile, technology stocks got a boost from Philips Electronics, Europe's largest consumer electronics maker. The Dutch group was up 8.3 percent to 16.24 euros at midday after saying losses narrowed in the third quarter and restated it would make a profit for the full year despite a weak market. (Full story) Another Dutch group, chip-equipment ASML, soared 15.8 percent to 7.75 euros, while France STMicroelectronics (PSTM), Europe's largest semiconductor manufacturer, gained 9.6 percent to 15.62 euros and Germany's Infineon Technologies (FIFX), the region's No. 2 chipmaker, added 8.9 percent to 7.38 euros. Infineon also received a lift from news that it had set up an alliance with Agere Systems of the U.S. to develop chips for new high-speed wireless networking systems. (Full story) But shares in chip designer ARM Holdings (ARM) were down 9.7 percent to 42 pence -- off their morning lows -- after the UK group said its third-quarter profit was halved by worsening semiconductor markets and that future licence deals would be affected unless industry conditions improved. (Full story) In the financial sector, Abbey National (ANL) rose 6.9 percent to 660.50 pence after Bank of Ireland said it would offer between 770 and 805 pence a share for the group. Shares in the Irish bank rose 4.4 percent to 10.05 euros. (Full story) "Obviously Abbey shares are going to go a bit higher but basically Bank of Ireland is publishing the terms of the initial offer and hoping that market reaction will force Abbey back to the table. There is still a very substantial part of the offer in shares,'' a London trader told Reuters. UK retailer GUS (GUS) was up 2.4 percent to 551 pence after the group said it remained confident about the second half after improved trading at its Argos retail chain and financial information unit Experian. (Full story) The AEX index in Amsterdam rose 5.9 percent, Milan's MIB30 index gained 3.8 percent and the SMI in Zurich added 3.6 percent. In the U.S. on Monday, stocks closed modestly higher, finishing out a quiet, low-volume day with a little momentum as investors digested a two-session rally amid new geopolitical concerns and mixed corporate news. The Dow Jones industrial average gained 27.11 points to 7,877.40, the Standard & Poor's 500 index rose 6.12 points to 841.44 and the Nasdaq composite added 10.06 points to 1220.53. Wall Street was expected to open higher later on Tuesday. S&P 500 index futures jumped 17.9 points to 859.50 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 843.50.
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