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European stocks rose the most in more than a week as German Chancellor Angela Merkel said she will receive French president-elect Francois Hollande with “open arms” as they work together to tackle the debt crisis.
Hollande defeated French President Nicolas Sarkozy to become the first Socialist in 17 years to control Europe’s second-biggest economy. He pledged to push for less austerity and more growth in the region.
Greece’s political leaders struggled to find the support needed to form a coalition government after voters flocked to anti-bailout parties, calling into question the country’s ability to impose the measures needed to guarantee its future in the euro.
German factory orders rose more than forecast in March as demand from outside the euro area helped Europe’s largest economy weather the debt crisis. Orders, adjusted for seasonal swings and inflation, jumped 2.2 percent from February, when they gained a revised 0.6 percent, the Economy Ministry in Berlin said.
National benchmark indexes rose in 12 of the 16 western European markets open today. Spain’s IBEX 35 jumped 2.7 percent and Italy’s FTSE MIB rallied 2.6 percent. Germany’s DAX added 0.1 percent and France’s CAC 40 increased 1.7 percent, while Greece’s ASE plunged 6.7 percent.
U.K. and Irish markets were closed for a holiday.
BNP Paribas and Societe Generale, the biggest French lenders, gained 4.2 percent to 30.21 euros and 4 percent 17.99 euros, respectively, erasing earlier losses. The spread between German 10-year government bond yields and French yields on similar-maturity debt narrowed.
UniCredit and Intesa Sanpaolo rose 5.6 percent to 2.85 euros and 3.9 percent to 1.09 euros, respectively, as UBS kept its positive view of the lenders among Italian banks.
Banco Santander SA, Spain’s biggest lender, rallied 4.7 percent to 4.90 euros. Banco Bilbao Vizcaya Argentaria SA advanced 5.4 percent to 5.29 euros.
Lafarge SA, the world’s biggest cement maker, increased 4 percent to 30.50 euros. Analysts at Citigroup Inc., Helvea AG and Equita SIM SpA upgraded the shares.
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