LONDON (AFP) — Europe's main stock markets rallied on Wednesday, led by the banking and auto sectors, after an overnight rally on Wall Street helped by falling oil prices that also lifted Asian share prices.
Telecoms were meanwhile in focus for a second day after mobile phone giant Vodafone surprisingly launched a share buy-back programme worth 1.0 billion pounds (1.3 billion euros, 2.0 billion dollars).
"The fall in oil prices, a 20-dollar fall since the record high touched on 11 July, has helped to buoy sentiment in stock markets," said ABN Amro analyst Melinda Smith.
By late morning in London, the FTSE 100 index of top companies had won 1.44 percent to stand at 5,441.40 points.
Frankfurt's DAX 30 gained 1.11 percent to 6,514.57 points and the Paris CAC 40 climbed by 1.43 percent to 4,388.97 nearing the half-way mark.
The Euro Stoxx 50 index of leading eurozone shares advanced by 1.35 percent to 3,371.13 points.
The European single currency stood at 1.5726 dollars.
US stocks had leapt higher on Tuesday in a late rally amid a steep slide in oil prices and renewed interest in the battered financial sector, dealer said.
Europe's banking sector shot higher on Wednesday, led by British mortgage lender HBOS, whose share price rocketed by 11.0 percent to 289.75 pence. Also in London, Royal Bank of Scotland shot up 7.41 percent to 213.75 pence and Barclays won 6.35 percent to 334.75 pence.
Credit Agricole soared 6.15 percent to 14.5 euros in Paris and Deutsche Bank's share price increased by 4.31 percent to 59.26 euros in Frankfurt.
The US financial sector, savaged since the subprime mortgage crisis erupted more than a year ago, lured investors on Tuesday with a series of better-than-expected results from big banks like Wells Fargo, Citigroup and Bank of America.
Wall Street's Dow Jones Industrial Average shot up 1.18 percent to close at 11,602.50 points overnight.
Japanese share prices rose by almost one percent on Wednesday to a two-week high, lifted by the rally on Wall Street, a drop in crude oil prices and easing financial worries, dealers said.
They added that a weaker yen eased concerns about the outlook for export earnings, giving an additional boost to the market.
Oil prices, which had fallen sharply on Tuesday, dropped further to stand below 127 dollars a barrel in London as the market expected Hurricane Dolly to avoid energy installations in the Gulf of Mexico, traders said.
Falling energy costs meanwhile boosted the European auto sector in stock market trade on Wednesday.
In Paris, the share price of French auto group PSA Peugeot Citroen amassed a gain of 8.26 percent to 34.59 euros, but analysts put the jump largely down to the group unexpected announcement of strong quarterly profits.
Peugeot reported a 49-percent surge in net profit for the first half of the year to 733 million euros (1.16 billion dollars).
The improvement in the results arose mainly from a programme to increase competitiveness called Cap 2010, the group said.
Peugeot's news and falling crude futures together helped to lift its peers, with rival French carmaker Renault winning 3.67 percent to 58.15 euros.
In Frankfurt, BMW rose 3.65 percent to 31.82 euros and Volkswagen climbed by 3.62 percent to 203.12 euros.
Meanwhile in London, Vodafone gained 2.56 percent to 132.3 pence after unveiling its share buy-back programme.
The announcement came one day after the company's stock price had closed down almost 14 percent on a warning that Vodafone's full-year sales would disappoint the market.
The British group added on Wednesday that the company was now significantly undervalued.
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