By Michele Maatouk And Colin Ng
Stock-market benchmarks in London, France and Germany rose to fresh multiyear highs, helped by upbeat earnings reports and led by gains in car makers including BMW /zigman2/quotes/209548467/delayed DE:BMW +0.55% and PSA Peugeot Citroën.
The broader Stoxx Europe 600 index, however, edged down 0.1% to 288.56, breaking a five-session winning streak. It rallied 1% Monday to its highest closing value since September 2008.
In Asia, Japanese and Australian stocks ended at their highest points in several months on upbeat corporate earnings, but most other markets fell.
Europe's auto sector got a boost from BMW, which said its global car sales surged 28% in January from a year earlier. BMW jumped 4.7% in Frankfurt. The auto sector was also helped by Japan's Toyota Motor, which raised its net-profit forecast for the full year through March.
Overall, stocks showed little reaction to news that China will raise its benchmark deposit and lending rates by a quarter percentage point. Analysts said that while the timing of the announcement was a surprise, the move itself was widely expected. Basic-resource shares initially came under pressure but later recovered.
In LONDON , the FTSE 100 index rose 0.7% to 6091.33, its highest close since May 2008. Most banks recovered from early losses to end the day in positive territory, after declining on news that the U.K. government is increasing its bank levy. Lloyds Banking Group /zigman2/quotes/200709414/composite LYG +0.35% and Barclays /zigman2/quotes/206581728/composite BCS +2.64% ended up 2.1% and 0.5%, respectively, but Standard Chartered closed down 0.9%.
In FRANKFURT, the DAX added 0.5% to 7323.24, its highest close since January 2008. Among car makers, Daimler rose 3.1% and Volkswagen /zigman2/quotes/206736865/delayed DE:VOW -0.06% added 3.3%.
In PARIS , the CAC-40 index gained 0.4% to 4108.27, its highest close since September 2008. PSA Peugeot Citroën rose 4.3% and Renault gained 3%. ArcelorMittal /zigman2/quotes/202790215/composite MT -1.01% added 2.8%. The steelmaker posted a fourth-quarter loss of $780 million, but said the gradual demand recovery should continue in 2011.
In TOKYO , the Nikkei Stock Average rose 0.4% to 10635.98, its highest close in more than nine months. Sumitomo Metal Mining /zigman2/quotes/205273301/delayed JP:5713 +0.72% rose 1.7% after the nonferrous-metals company late Monday raised its earnings outlook for the fiscal year to March because of higher-than-expected prices of gold, copper and other metals. KDDI /zigman2/quotes/204923990/delayed JP:9433 +0.29% jumped 5.8% after Credit Suisse Group raised the stock to "outperform" from "neutral" on the performance of the company's smartphone business and a change of chief executive. General contractor Kajima /zigman2/quotes/206026698/delayed JP:1812 -0.70% added 4.5% after reporting a 25% increase in nine-month net profit.
In SYDNEY , S&P/ASX 200 added 0.5% to 4890.36, its fifth consecutive gain and the highest close since April. Lenders rose on a bullish trading update from National Australia Bank /zigman2/quotes/210431826/delayed AU:NAB -0.20% , which climbed 1.9%. Westpac Banking /zigman2/quotes/206661702/composite WBK -0.41% rose 1.1% and Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA +0.30% added 0.8%.
In HONG KONG , the Hang Seng index slipped 0.3% to 23484.30. Cnooc fell 2.1% after an overnight drop in crude prices.
In MUMBAI , the Sensex shed 1.5% to 17775.70, its lowest close since July. Investors fear that rising inflation will lead to further interest-rate increases. Concern about rising input costs pulled down most auto shares. Mahindra & Mahindra slumped 6%; Tata Motors /zigman2/quotes/209145303/composite TTM -0.63% fell 2.9%. .