European stock markets posted solid gains Tuesday in thin, holiday trade, with investors defying revived eurozone debt worries after Portugal was hit by a downgrade threat. The advances were supported by positive corporate news, particularly in the oil and financial sectors, and were in line with an upbeat start to the day on Wall Street.
In London, the FTSE 100 index added 1.09 percent to finish at 5,951.80 points while in Paris CAC 40 rose 1.09 percent to 3,927.49 points. The Frankfurt DAX gained 0.85 percent to reach 7,077.99 points, its highest reading since May 30, 2008.
The gain in the DAX reflected portfolio "window dressing" in which investors try to acquire the best performing stocks while shedding weaker performers before closing their books for the year. Stock markets in both Madrid and Lisbon meanwhile rose 2.07 and 0.59 percent respectively, little moved by negative ratings actions by Moody's Investors Service.
But confidence in the battered European economy was given a shot in the arm after China expressed support for European Union measures to tackle a eurozone finance crisis plaguing Portugal, Spain, Ireland and Greece. The government in late November put third quarter growth at 2.5 percent, an improvement on an earlier estimate of 2.0 percent.
London investors also brushed aside a report that British public borrowing soared in November to the highest monthly level since records began, sparking concern that the government could overshoot its annual target. Banks were especially well supported, with Royal Bank of Scotland rising 4.47 percent and Barclays 2.82 percent. It was the same story in Paris, where Societe Generale added 3.88 percent and BNP Paribas 1.03 percent.
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