By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets rose on Tuesday, with banks and mining firms in the lead, as investors welcomed signs of progress in U.S. budget negotiations.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.65% climbed 0.5% to close at 280.46, snapping a three-day losing streak.
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“The fiscal cliff is the major factor. There are concrete signs that the difference between the two parties are narrowing,” said Victoria Clarke, economist at Investec Securities.
“It’s optimism that we’re close to a deal that is the main driver,” she said. See: MarketWatch’s coverage of the fiscal cliff.
Shares of Nokia Corp. /zigman2/quotes/207421390/composite NOK +1.45% posted one of the biggest gains in the pan-European index and jumped 7.9%. Vincent Maulay, analyst at Oddo Securities, said it could be a reflection of strong sales of the Lumia 920 phone.
Risk-sensitive sectors such as mining firms were also on the rise.
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Shares of heavyweight miner BHP Billiton PLC /zigman2/quotes/208108397/composite BHP +2.04% /zigman2/quotes/201448516/delayed AU:BHP -0.08% gained 1.2% in London, while Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO +0.32% /zigman2/quotes/202627887/composite RIO +1.51% /zigman2/quotes/200083756/delayed AU:RIO -0.22% rose 2.8%. See: Gold futures fall as safe-haven appeal dulls.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.52% added 0.4% to 5,935.90. See: Resource firms, banks lead U.K. stocks higher.
ARM Holdings PLC was also on the rise in London, up 1.6%, as the chip maker launched a joint venture in an effort to beef up security on smartphones and tablets. See: ARM venture aims to tighten smartphone security
The fiscal cliff refers to billions of dollars in U.S. spending cuts and tax hikes slated to automatically take effect in the new year.
President Barack Obama on Monday made a new offer to the Republicans, including $1.2 trillion in revenue increases and $1.22 trillion in spending cuts. See: Obama reportedly makes new fiscal-cliff offer
At a news conference on Tuesday, House Speaker John Boehner, however, said the White House’s latest offer wasn't balanced and that the Republicans were readying a bill to increase taxes on incomes of more than $1 million. See: Republicans ready 'plan B' tax bill in cliff talks
U.S. stocks opened higher on Wall Street. See: Fiscal-cliff talks lift stock index futures
Clarke from Investec Securities said markets should also be positioned for a firm start to the new year.