European stocks climb before British budget

LONDON: European stock markets rose in morning deals Wednesday, as investors in London awaited Britain's annual budget and German reinsurers estimated their losses from the Japanese earthquake.

The British capital's benchmark FTSE 100 index rose 0.52 percent to 5,792.54 points, Frankfurt's DAX 30 climbed 0.28 percent to 6,800.37 points and

in Paris the CAC 40 gained 0.51 percent to 3,912.63 points.

All eyes were on Britain's annual budget, to be announced by finance minister George Osborne at 1230 GMT. Chancellor of the Exchequer Osborne is promising a budget to promote growth after unveiling massive spending cuts last year aimed at slashing a record budget deficit for Britain.

"Looking ahead, the 2011 budget is due... with the chancellor outlining his fiscal strategy following last year's savage cuts," said IG Index trader Ben Critchley.

"Reports that the budget deficit is slowly eroding, and speculation that there is little room for further tightening, mean it is unlikely that Mr Osborne will be producing any fireworks... He may bring out a couple of sparklers to keep things interesting, though it remains to be seen whether this will be enough to ignite the markets."

In Frankfurt meanwhile, German reinsurance group Hannover Re said the Japanese disasters would cost it about 250 million euros ($350 million), six times less than global giant Munich Re.

Any assessment of losses is "still subject to considerable uncertainty," a statement noted, but based on a preliminary analysis.

The world's biggest reinsurance company, Munich Re, said late Tuesday that the March 11 Japanese earthquake and tsunami would result in claims payments of around 1.5 billion euros.

After initially posting marked drops on the Frankfurt stock exchange, shares in the two groups recovered in late morning trades.

Shares in Hannover Re showed a loss of 0.26 percent at 38.62 euros and Munich Re shares were essentially unchanged at 110.05 euros.

In Asia trading, Japanese shares closed sharply lower after Tokyo authorities said levels of radioactive iodine exceeded safe limits for infants for two consecutive days amid a deepening food radiation scare.

Profit-taking also set in Wednesday after two days of gains following a massive sell-off last week in the wake of Japan's devastating earthquake, tsunami and a nuclear crisis at a stricken atomic plant.

Elsewhere, Egypt's stock exchange plunged nearly 10 percent after reopening for the first time since January 27 -- the start of an uprising that toppled long-time president Hosni Mubarak the following month.