By Sara Sjolin, MarketWatch
German DAX jumps to highest since May 2015
European stocks leapt Wednesday, pushed to their highest in more than a year by optimism over fresh records in the U.S. markets and a rally in bank shares.
The Stoxx Europe 600 index climbed 1.3% to end at 366.59, its highest close since December 2015. The jump also marked the strongest one-day percentage gain since Nov. 9 last year.
Indexes throughout the region rallied alongside U.S. stocks, with the Dow Jones Industrial Average for the first time opening above 20,000. That marked the second-fastest, 1,000-point climb for the index of 30 blue-chips (http://www.marketwatch.com/story/dow-stays-on-path-to-20000-milestone-ahead-of-key-earnings-2017-01-25).
"The Dow has capped a remarkable rally since Donald Trump's election by finally breaking the 20,000 level. It's psychologically huge and, after a bit of pullback ahead of the inauguration, really confirms that the 'great rotation' from bonds to stocks is definitely upon us," said Neil Wilson, senior market analyst, at ETX Capital, in a note.
"This is a major recalibration in global stocks and bond markets -- ie, not a bubble in the pure sense, although it might be rising faster than is natural.," he added.
Germany's DAX 30 index gained 1.8% to 11,806.05 to close at its highest level since May 2015.
France's CAC 40 index added 1% to 4,877.67, while the U.K.'s FTSE 100 index rose 0.2% to 7,164.43.
Spain's IBEX 35 index rallied 1.7% to 9,549.30, buoyed by Banco Santander SA (SAN) (SAN) .
Bank cheer: Banco Santandershares jumped 4% after the Spanish lender reported a rise in profit (http://www.marketwatch.com/story/santander-profit-buoyed-by-fees-lending-2017-01-25) on higher fees and stronger-than-expected lending income.
As Banco Santander is the first of the major European banks to report, its upbeat earnings statement spurred optimism over the coming results from other lenders.
Read:From unloved to favorite: Why European bank earnings will cheer investors (http://www.marketwatch.com/story/from-unloved-to-favorite-why-european-bank-earnings-will-cheer-investors-2017-01-25)
Shares of BBVA SA (BBVA) (BBVA) added 3.2%, Société Générale SA (GLE.FR) climbed 4.3%, and UniCredit SpA (UCG.MI) gained 8.9%.
Deutsche Bank AG (DBK.XE) (DBK.XE) put on 5.8% following a Reuters report the German bank is considering spinning off its asset management business (http://uk.reuters.com/article/us-deutsche-bank-asset-management-ipo-idUKKBN1582EJ) through an initial public offering.
Shares of Intesa Sanpaolo SpA (ISP.MI) underperformed the sector, up only 0.4%, after the Italian bank said it's eyeing a tie-up with Assicurazioni Generali SpA (G.MI) . Assicurazioni Generali added 1% in Milan.
The Stoxx Europe 600 Banks Index rose 3% to 179.14, its highest close in more than a year.
Other movers: Logitech International SA (LOGI) rallied 16% after the computer-accessories company posted earnings ahead of forecasts.
Novartis AG (NOVN.EB) (NOVN.EB) put on 2.4%. The Swiss pharmaceutical company said it may spin off its ailing eye-care business Alcon (http://www.marketwatch.com/story/novartis-may-spin-off-alcon-eye-care-unit-2017-01-25).
BHP Billiton (BLT.LN) (BHP.AU) (BHP.AU) on Wednesday said it now expects to supply 1.62 million metric tons of copper during the year through June. That's 2% lower than its prior forecast (http://www.marketwatch.com/story/bhp-billiton-warns-of-lower-copper-output-2017-01-24). BHP shares dropped 1.6%.
Economic news:French business sentiment was unchanged (http://www.marketwatch.com/story/french-business-sentiment-unchanged-in-january-2017-01-25) in January, as company executives reported a slowdown in output recently. But they struck a more optimistic tone for the future, according to official statistics agency Insee.
German business confidence missed forecasts in January. The Ifo business climate index came in at 109.8, below expectations of a 111.3 reading.
In Italy, the country's constitutional court ruled rejected the idea that elections could be held in two rounds (http://uk.reuters.com/article/uk-italy-elections-law-idUKKBN15923N), seen as helping pave the way for early elections in 2017, according to Reuters.
In European Central Bank news, executive board member Sabine Lautenschläger late Tuesday signaled the ECB should soon start to taper its aggressive bond-buying program (http://www.marketwatch.com/story/ecbs-lautenschlaeger-optimistic-qe-end-is-near-2017-01-25).
(END) Dow Jones Newswires
January 25, 2017 12:13 ET (17:13 GMT)
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