Europe close: Europe gains on German confidence



LONDON (ShareCast) - - German business confidence grows for the month, according to Ifo
- Standard & Poor's raises rating on Greece to B-minus
- US edges closer to budget deal
- UBS (Berlin: UBRA.BE - news) pays £940m fine in Libor fraud case

FTSE-100: 0.43%
Dax (Xetra: ^GDAXI - news) -30: 0.19%
Cac-40: 0.44%
FTSE Mibtel 30: 1.10%
Ibex 35: 1.17%
Stoxx 600: 0.42%

European equities had climbed by close Wednesday as German business confidence grew to its fastest rate in two and a half years.

The Munich-based Ifo think tank said the institute's monthly business climate index, based on a 7,000 firms, increased to 102.4 in December, compared to 101.4 in November (Xetra: A0Z24E - news) .

The news brought hope to Europe's largest economy that it would soon bounce back from its slump.

"It shows a sign that Germany might be turning a page and worst of the crisis is over," market strategist Ishaq Siddiqi told Sharecast.

The European economy has also been bolstered by news that Standard & Poor's had raised its rating on Greece to B-minus from selective default late Tuesday, the highest the country has received since June 2011.

Meanwhile US budget talks have pushed European stocks higher as Republicans and Democrats look set to reach a compromise to combat fiscal cliff fears in 2013.

UBS fined over Libor fraud

Swiss banking giant UBS agreed to pay £940m to regulators in order to settle charges of manipulating Libor interest rates. It was the second-largest fine penalty paid by a bank.

Mining sector backed by investors

BHP Billiton (NYSE: BBL - news) , Vale and Rio Tinto (Xetra: 855018 - news) share prices soared to new highs following a large stream of investments into the mining sector. The companies, which account for the bulk of the seaborne iron ore market, were seeing improvements amid signs of growing demand for the mineral in China.

IAG, the parent company of British Airways, was also doing well in afternoon trading following the announcement of the airline's new route to the China city of Chengdu.

Analysts said European financials also received a boost from a sector upgrade to 'overweight' by Credit Suisse (NYSE: CRP - news) in its Global Equity Strategy 2013 outlook.

Euro rises against dollar

The euro/dollar rose 0.19% to the 1.3254 dollar level.

Front month Brent crude futures soared 1.073 dollars to the 110.010 dollar mark on the ICE.